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Thread: The Great Pension Deficit

  1. #1

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    Default The Great Pension Deficit

    Anybody ready for our next crisis?
    The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund.
    http://www.ft.com/cms/s/0/bd1c2552-f...nclick_check=1


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  3. #2

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    Default Re: The Great Pension Deficit

    Quote Originally Posted by Bullitt View Post
    I know the local Fire & Police depts in area towns are having a difficult time and holding many discussion meetings on how to try to save the Funds & still have pay-outs of some adequate amount or another.........
    The cities themselves are involved, and it seems the depatments the public needs the most are the first to get hammered........

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  5. #3

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    Default Re: The Great Pension Deficit

    It's only getting worse, but we knew this was going to happen. Pension Funds are piling on the risk in hopes of making up lost ground. So much for the senseless propaganda they spit out to us that, "Slow and steady wins the race."

    Many say, "Big deal, when the market tanks, I'll just be sure to get out before everyone else." Is that what these guys are thinking now too? This is complete insanity. In 2008 these big funds piled into commodities such as lumber only to get steamrolled in the crash. Has anybody learned anything from the past 10 years?

    Pension Funds Are Adding to Risk to Raise Returns
    http://www.nytimes.com/2010/03/09/bu...agewanted=1&hp

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  7. #4

    Default Re: The Great Pension Deficit

    They're doing more than accepting greater risk...the states will use accounting methods for budget purposes...giving a double whammy. Virginia is considering deferring some contributions.

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  9. #5

    Default Re: The Great Pension Deficit

    At what point do you think they'll go after our retirement system again?
    God bless the United States of America!

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  11. #6

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    Default Re: The Great Pension Deficit

    Some of our rep's have already proposed cuts in our retirements system.
    Where is the Money?

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  13. #7

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    Default Re: The Great Pension Deficit

    Quote Originally Posted by merlin View Post
    Some of our rep's have already proposed cuts in our retirements system.
    Reduce the government and that will reduce the retirement.....If I hear one more politician complain that government workers are a problem, I'm going to ask that they give up everything first!
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    Check my position

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  15. #8

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    Default Re: The Great Pension Deficit

    Quote Originally Posted by merlin View Post
    Some of our rep's have already proposed cuts in our retirements system.
    They have already done that with FERS, NOT AGAIN!! nomonkey1.gif



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  17. #9

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    Default Re: The Great Pension Deficit

    I think the bottom line here is that not only are households short on earnings projections but so are pensions and municipalities. The Fed Gov't doesn't care because they have a tool nobody else does, a printing press. Local Governments are forced to make the tough decisions, (even though they do everything in their power to defer) and meanwhile pensions can just take on higher margin and speculation.

    Governments don't think long term; instead it's, "We have all this money and if we don't spend it this fiscal year, we won't get it again next year". In turn the locals dump excess cash on things like road salt in March. The rub is, if the economy goes down, they won't have a 'savings' account to draw off as their tax income goes down the tubes. That's what we have going on now. Think of how much money is (or was) collected from property taxes. The housing bubble caused elected officials to project the boomin' bubble days into forever land and never felt the need to save money.

    Right now we also have what's called the Wealth Effect going on. Speculators- I wish I could say Investors, but nobody invests anymore- are spending again because the stock market is up. Hence, the reason why at the end of the day, the ONLY thing that matters to politicians is the stock market. It's like a little scorecard in real time on 'how we're doing'. Right now the algos and margin traders are in a desperate and frantic push to 'get back to even' after being destroyed in 2008. A very rare few were able to come out ahead in 2008 and I'd say even less bought in March and are still holding on today.

    Happy days are here again, and as long as the music is playing, you might as well drink some Kool Aid from the punchbowl and dance. Be careful, the Kool Aid once wiped out 918 souls in Jonestown.

    "When the music's over, turn out the lights," Jim Morrison. The music ended over two years ago.


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  19. #10

    Default Re: The Great Pension Deficit

    When many state and local police officers and firefighters have the ability to make more per year in pension retirement than they made while on the job, eventually that bill will have to come due. Thanks Unions!

    When you have state pension funds giving their business to money managers who have friends in high places it spells trouble.

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  21. #11

    Default Re: The Great Pension Deficit

    There's a story about Oklahoma teachers' pensions imposing a $9,000 liability per OK household. Eyecatching for the reader. The stories will keep coming because the media is drawing a bullseye on overpaid government workers with incredibly generous benefits. It seems inevitable that there will be some effect at the local and state level and cause some changes in their pension rules. When is debatable, and probably related to the liberal vs conservative struggle underway. We are kicking every other can down the road.

    The Vallejo, CA story is probably only one of many lurking in the background that will pop up when/if federal support stimulus payments dry up. What's the timeframe for that? 2012?

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  23. #12

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    Default Re: The Great Pension Deficit

    Quote Originally Posted by Warrenlm View Post
    There's a story about Oklahoma teachers' pensions imposing a $9,000 liability per OK household. Eyecatching for the reader.

    Really?

    Now who is it that controls the legislature in that state, that is responsible for ensuring the legal requires set in federal law are met? You know- the ones that all pensions are required to be fully funded?

    How did that state fail to pay it's required pension contributions?

    Oh- wait. I forgot. State pensions aren't subject to the same federal regulations that private companies and the federal government are both required to follow.

    So what you are saying is that the poor state workers, who make a small amount, are to blame for the state legislature failing to allocate enough money to pay what is owed it's workers?

    In the private sector- companies have gone bankrupt and out of business over failing to pay their required pension costs in advance.

    http://www.dol.gov/ebsa/pensionreform.html

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