Thread: The Great Pension Deficit

Originally Posted by Boghie

... The politicians put the assets in a 'lock box' that invested in only one financial vehicle

Ahh HAA!

So you ADMIT that Al Gore won.

Pensions are a contractual benefit until the pensioner meets death - then that obligation terminates. You can accept a lower payout that will continue for a spouse until death. These benefits are and can be subject to change. When you have the choice of a 401K or a defined contribution plan the money in the account is already yours and there is always a beneficiary so the funds can be passed on until exhausted. The pension agency no longer has any obligations for your retirement. The days of the defined benefit programs are numbered - they are just to expensive and risky for the agency. The defined contribution retirement plan does require the employee to take responsibility for the future gains - and they better get educated about the markets. This all makes a bull like myself see dollar signs.

Originally Posted by James48843

Ahh HAA!

So you ADMIT that Al Gore won.

Eh???

The only President to attempt to allow personal ownership of at least a portion of ones Social Security assets was 'W'. President Clinton did nothing other than jigger the Social Security pension benefit by taxing some of it. Was that a positive?

A 'lock box' is not an account controlled by a politician or an actuary. Anyone want either Senator Frankin or Senator DeMint running your retirement asset account? How about Representative Boehner or Representative Pelosi? Anyone want President Bush, Obama, Clinton, or even Gore and McCain? Yuk. Double Yuk. What a crappy choice we had in Nov08.

I want investment allocation options and I want control of it.

I don't want a mythical promise of an 8% gain. I don't want any politician to control my asset allocation (all in the G Fund - even at 30 years old, yuk!!!) and promising me he/she will stand by me twenty years from now.

What is the difference between what's happened in Greece (country is finished) and what is happening in California? Just keep borrowing from future generations so baby boomers, who allegedly walked uphill both to and from school in the snow, can fart around on their iPhone in their retirement home on the water. Hey, it's entitled to them right?

What ever happened to a rainy day fund? Spend when times are good, ask for money when times are bad.

Taxpayers would be on the hook for increasing their contribution to the state employees' pension fund by $600 million a year — at a time when the state budget is $19 billion in the red — under a recommendation approved Tuesday by a committee of the California Public Employees' Retirement System.

http://www.latimes.com/business/la-f...,3667497.story

Hey don't worry. It never rains in Southern California.

I have to say my state has been talking about developing a rainy day fund for years, but it just gets shot down every time it comes up for a vote.

People want their $50-100 tax rebate too much. (balanced budget-any tax collection in excess of biennial budget gets rebated-every year-on top of the refund due at time tax return filed). We're going to be hurting bad here state budget wise about this time next year due to lack of rainy day prep.

Pensions have been a joke for a while now, at least in the Private sector. That's why so many people have IRAs and 401K's, and ride the market trying to make money.

It's just punching the States now. To make money, they put the money in investments - many of which just took a major bath or have drowned.

All the more reason to take the TSP more seriously. How would you handle a letter in the mail that says your pension will be cut 50% starting tomorrow?

Paying Back Pension Mistakes.

http://online.wsj.com/article/SB1000...YWORDS=pension

Unfortunately a pension similar to an annuity is not your money - it's only an obligation extended from the employer and is subject to change. A defined contribution plan is your money from the start but requires a certain degree of investment acumen. My wife's plan was just devalued $49K since April - but she has over 26,000 shares of an index fund that will gain in value - in the meantime she buys more shares at lower pricing. What's not to like.

Originally Posted by Birchtree

Unfortunately a pension similar to an annuity is not your money - it's only an obligation extended from the employer and is subject to change. A defined contribution plan is your money from the start but requires a certain degree of investment acumen. My wife's plan was just devalued $49K since April - but she has over 26,000 shares of an index fund that will gain in value - in the meantime she buys more shares at lower pricing. What's not to like.

Birch,

Whats 'not to like' would be another 10 or 15 years of banging around - or slow market drop.

Then it would be cash holdings that 'make' money. Deflation is 'whats not to like'. I can't say we aren't heading there...

The mythical 8% gain.
And, the I forgot to fund it.
And, why can't I retire at 52.

Me thinks Prichard is rich compared to Illinois and Kalefornea

I am absolutely ecstatic that the major portion of my retirement is in a defined contribution plan (TSP).
I don't want politicians cutting my income in my dotage to cover some union wage.
Back in the bygone era - oh, how the times were a'rolin'...
Not so much now. Kinda overpromised...

What happens to a Ponzi scheme when it is popped?
Let us put it this way - it does not gracefully wind down.

Now, if we take a gander down the road of recent history we remember that:

• Mark-To-Market rules came into effect in 2007
• and, Bernanke was raising interest rates in 2006/7

Did the housing bubble pop gracefully?

What happens when unfunded pension liabilities see the light of day and the dumb money starts moving?

This could make the .Com and Housing Crashes seem like walks on a summer day.