How will unfunded “pensions” affect the local economy?

[Anonymous]

[quote=bearishgurl]
I’m truly sorry for you that YOU DIDN’T CHOOSE to attempt to “qualify” for one of these eligible positions in line for a(n eventual) DB plan upon retirement. However, that decision was YOUR CHOICE! You COULD have elected to “jump thru the proper hoops” in attempt to get hired … alas but you didn’t! Thusly, you have NO RIGHT at this late date to condemn those persons who have served their qualified (faithful) service so as to earn their current pensions.[/quote]

Typical ad hominem response.

BG, you can’t seem to discuss an issue without making personal claims about people that are completely fabricated.

(And then there’s the perpetual references to your personal financial situation, which are just plain weird…)

Here’s an actual fact: I did have a position that offered a DB pension. I was an officer in the US Army, commissioned through a full ROTC scholarship – a process that requires a few qualifications!

Now please tell us again, for the umpteenth time, how arduous it was for you to get your guberment job. I’m sure your experience makes boot camp and paratrooper training sound like a picnic on a sunny day…

[livinincali]

[quote=bearishgurl]
harvey (aka pri_dk), if you think there are only TWO Piggs who grasp this concept, you need to put on your thinking cap. Let me clue you in, here. There are several more Piggs here who are currently working FT (for the gubment) under the premise that they will eventually be due a pension under a “defined benefit plan.”

I’m truly sorry for you that YOU DIDN’T CHOOSE to attempt to “qualify” for one of these eligible positions in line for a(n eventual) DB plan upon retirement. However, that decision was YOUR CHOICE! You COULD have elected to “jump thru the proper hoops” in attempt to get hired … alas but you didn’t! Thusly, you have NO RIGHT at this late date to condemn those persons who have served their qualified (faithful) service so as to earn their current pensions.[/quote]

It might be smart to have not worked under the promise of a DB plan. If it’s going to be cut in the future and based on the math of most of these plans it will probably have to be cut in some form, then you would have been better off not taking the promise of deferred compensation. The risk pool concept of a DB plan is good for most people. The problem is the benefit is not calculated as Total Amount put away plus a reasonable compounded interest rate (maybe 5%) and then distributed a rate rate similar to an annuity. It’s generally something much higher than that. That’s why there’s a problem. It’s the difference between the total amount put away plus investment returns versus the amount that was promised to be distributed.

[FlyerInHi]

I kinda agree, livin Some full benefits are costly and useless.
For example health care. I would rather have basic, rationed, universal government run health care in very utilitarian but competent hospitals, with long but doable wait times. The cost of health insurance that my employer incurs would instead be paid to me in cash that I could invest and do whatever I want.

[bearishgurl]

[quote=harvey]. . . Here’s an actual fact: I did have a position that offered a DB pension. I was an officer in the US Army, commissioned through a full ROTC scholarship – a process that requires a few qualifications! . . .[/quote]harvey, did you have the required number of years of service to actually vest in your DB pension?

If not, why not?

Are you currently collecting military retirement, and if so, at what age did you begin collecting it?

If not, will you collect military reserve retirement at age 60?

YOU are one of the biggest complainers (if not THE biggest complainer) on this board regarding others’ DB pensions they earned over decades of service. Or any other gubment benefit someone else is eligible for, for that matter. The Piggs need to know whether to consider you the pot ….. or the kettle.

Yes, YOUR personal situation is absolutely relevant here! Not sure if your continual attacks on gov workers’ pay and pensions are just envy rearing its ugly head … or what exactly …. It’s just weird.

[FlyerInHi]

BG, it’s not envy. The reason for complaining is that services are cut while salaries and pensions are not; all the while budgets are growing.

There are better, more efficient ways of rendering services to citizens, which which what reforms is all about.

It’s not all government. Private health care needs reform too so the sector doesn’t keep taking a larger share of the economy.

[Anonymous]

[quote=bearishgurl]harvey, did you have the required number of years of service to actually vest in your DB pension?[/quote]

On multiple occasions you have claimed that I and others were not able to qualify for job that offered a government pension. You previous post makes the claim once again:

[quote]You COULD have elected to “jump thru the proper hoops” in attempt to get hired … alas but you didn’t![/quote]

I did “jump through the hoops” – I even jumped out of airplanes!

So I’ve proven you wrong (not that it’s much of an accomplishment, nor do I expect you to comprehend…)

[quote]YOU are one of the biggest complainers (if not THE biggest complainer) on this board regarding others’ DB pensions they earned over decades of service.[/quote]

Uh, no.

I’ve never “complained” about your pension, or any individual’s personal financial situation on this forum.

My position is that government defined benefit pensions are bad policy. It’s not personal. It has nothing to do with my vesting or your vesting or anybody in particular.

The ongoing pension discussions here are a political debate concerning government policy.

[quote]Yes, YOUR personal situation is absolutely relevant here! Not sure if your continual attacks on gov workers’ pay and pensions are just envy rearing its ugly head … or what exactly …. It’s just weird.[/quote]

No, NOBODY’s personal situation is relevant here.

This is a real estate and economics forum. Government pension costs are a relevant and timely topic of discussion here. Read the title of the OP for this thread. Discussions about the impact of pension costs on local real estate are entirely appropriate.

What’s not appropriate are false claims about my personal situation.

Your posting history in this thread alone demonstrates that you are not capable of understanding the difference between substantive policy debate and ad hominem arguments.

Here’s what’s weird: The fact that you’ve been sharing personal details of your life and career while posting detailed yet unfounded speculation about others for so many years.

[bearishgurl]

So, in reading between the lines, here, harvey, if YOU’RE actually collecting a gubment pension yourself, do you feel it’s “bad policy” to pay YOU every month if the Federal Gubment is trillions of dollars in debt??

What you DIDN’T answer here is very telling.

[Anonymous]

[quote=bearishgurl]So, in reading between the lines, here, harvey, if YOU’RE actually collecting a gubment pension yourself, do you feel it’s “bad policy” to pay YOU every month if the Federal Gubment is trillions of dollars in debt??

What you DIDN’T answer here is very telling.[/quote]

I don’t have a government pension. Go ahead and speculate otherwise. Fabricate my entire life story if it makes you happy. I really don’t care what you choose to “read between the lines.”

Your fixation on other poster’s personal situations is pretty creepy.

[bearishgurl]

[quote=harvey][quote=bearishgurl]So, in reading between the lines, here, harvey, if YOU’RE actually collecting a gubment pension yourself, do you feel it’s “bad policy” to pay YOU every month if the Federal Gubment is trillions of dollars in debt??

What you DIDN’T answer here is very telling.[/quote]

I don’t have a government pension. Go ahead and speculate otherwise. Fabricate my entire life story if it makes you happy. I really don’t care what you choose to “read between the lines.”

Your fixation on other poster’s personal situations is pretty creepy.[/quote]

I don’t have to “fabricate” anything about you, harvey. You’ve laid it out here for us, yourself. You just posted that you accepted a gubment position with a defined benefit plan and now you’re essentially saying that you either didn’t vest in the plan or are not yet eligible to collect the pension you will be due.

If you didn’t vest in that DB plan for which you took a position which required your highly specialized skillset, I’m sorry to hear this, harvey.

There is a reason for everything. I’ll just leave it at that.

[all]

[quote=bearishgurl]
There is a reason for everything. I’ll just leave it at that.[/quote]
No! Not another cliffhanger!
Let me guess, John Snow’s spirit lives through his pup?

[FlyerInHi]

[quote=bearishgurl]So, in reading between the lines, here, harvey, if YOU’RE actually collecting a gubment pension yourself, do you feel it’s “bad policy” to pay YOU every month if the Federal Gubment is trillions of dollars in debt??

What you DIDN’T answer here is very telling.[/quote]

Actually, this issue is like the paradox of thrift. What is good for individuals is bad policy.

Intellectually honest people are able to separate their own interests from policy. Warren Buffet is a billionaire who does that pretty well.

[Parabolica]

The problem with defined contributions plans as I see it is that the vast majority of working people lack the financial sophistication required to invest for their retirement. They are consigned to investment company sharks by their ignorance and the limited choices available to them in their company 401(k) choices.

Harvey, how does the average person taking your prescription save for their own retirement? Do they know about index funds? Do they get idea of changing the equity/bond ratio as they approach retirement? If they look for advisers can they avoid the sharks? I say that they cannot begin to match the returns and stability provided by professional managers of defined benefit programs. Do you see it differently?

The corporations were allowed to strip workers of defined benefit plans, moving liabilities off their books, and giving employees the ‘freedom’ to chart their own financial course. It is like handing someone a parachute and kicking them out of a plane for the first time so that they may have the ‘freedom’ of learning how to reach the ground without perishing. Those stripped of defined benefit plans are angry that their employees, government workers, have not been been rendered naked as well. Understandable, but not pretty.

[paramount]

[quote=Parabolica]Those stripped of defined benefit plans are angry that their employees, government workers, have not been been rendered naked as well. Understandable, but not pretty.[/quote]

I’ll admit I am very unhappy about loosing my DB plan – my company took away our DB plan 2008-2009 – with barely a wimper (if even that) from employees.

I’m hopeful though we’ll start to break public unions with Friedrichs v. CTA.

[livinincali]

[quote=Parabolica]The problem with defined contributions plans as I see it is that the vast majority of working people lack the financial sophistication required to invest for their retirement. They are consigned to investment company sharks by their ignorance and the limited choices available to them in their company 401(k) choices.

Harvey, how does the average person taking your prescription save for their own retirement? Do they know about index funds? Do they get idea of changing the equity/bond ratio as they approach retirement? If they look for advisers can they avoid the sharks? I say that they cannot begin to match the returns and stability provided by professional managers of defined benefit programs. Do you see it differently?

The corporations were allowed to strip workers of defined benefit plans, moving liabilities off their books, and giving employees the ‘freedom’ to chart their own financial course. It is like handing someone a parachute and kicking them out of a plane for the first time so that they may have the ‘freedom’ of learning how to reach the ground without perishing. Those stripped of defined benefit plans are angry that their employees, government workers, have not been been rendered naked as well. Understandable, but not pretty.[/quote]

I don’t blame companies for moving the liability off there books. Are there any cities or government organizations that are in really good shape with their define benefit pension plan? The only thing that would make those government workers whole is an unlimited tax payer backstop. I think it’s virtually impossible to offer a define benefit plan that is somehow based a the last few years of salary while working and includes a variety of incentives to attempt to cheat that calculation.

If government employees want a shared defined contribution risk pool that pays out some defined benefit based on the total funds available and sound actuarial investment returns that’s fine with me. But if there’s problems within the fund let the risk pool of employees participating in such a plan bear the risks of poor performance or under contributing. That seems like a fair compromise to me. If the government employee union opts for higher payouts in retirement then contribute more during working years. If the funds are poorly invested then let those employees within the fund chose if they want to contribute more or accept lower benefits. Why should they be some special class of citizen that’s gets a tax payer funded bailout in retirement.

[Anonymous]

[quote=Parabolica]The problem with defined contributions plans as I see it is that the vast majority of working people lack the financial sophistication required to invest for their retirement.[/quote]

This is a problem, but there is no ideal solution.

Retirement as it exists today is actually two separate concepts:

1) As a society we want to insure the elderly against poverty.

2) Many people want to reap the rewards of hard work later in life by quitting their jobs and enjoying what they have accumulated.

Retirement is two things: insurance and a reward.

The two concepts overlap for sure, one needs to plan and save to achieve both.

I think government should be mostly responsible for item #1. As a society we can ensure that nobody find themselves destitute in old age. This guarantee should apply equally to everyone. We don’t need to divide society into public and private-sector groups.

For item #2, everyone is on their own. Some are going to be better than others for sure, but the idea of accumulating a nest-egg over many years isn’t that hard to grasp. There is enough regulation and information about investing available to protect all but the most naive from “sharks.” There really is no other way.

We already have a solution to #1. It’s Social Security. Not a perfect plan but it has been effective for nearly a century (probably longer than any other long-term financial program in history) and SS can continue indefinitely with occasional adjustments due to demographics. Social Security was always intended to be an insurance plan, not a retirement plan: it protects against poverty in old age. Despite the dire predictions we occasionally hear about Social Security, there are very credible and fair proposals to fix it.(Of course, medicare is also part of the solution.)

The approach is simple: Put everyone on Social Security, public and private sector. No special class of citizen. Keep Social Security transparent like it has been for many decades and we are all in it together. It works.

For those that want a lifestyle in retirement, then they are on their own. Save, invest, plan. Best of luck. It’s certainly doable, millions are already managing it just fine.

There is simply no need to have a class of citizens who are shielded from long-term investment risk at the cost of everyone else. The absurdly complex, corrupt, and broken government defined-benefit pension systems we have in America today is completely unnecessary.

[Author]

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