Someone mentioned on a thread that Chicago has a huge unfunded pension liability. It is so bad that every family in Chicago owes $40,000 in pension liability.
Philadelphia is the most critical case. Their pension fund starts going upside down in 2015. It's not just the union states that have huge unfunded pension liabilities: OK is in very bad shape.
Not to worry congress will bail those big blue cities out.
Big US cities could be squeezed by unfunded public pensions as they and counties face a $574 billion funding gap, a study to be released on Tuesday shows.
The gap at the municipal level would be in addition to $3,000 billion in unfunded liabilities already estimated for state-run pensions, according to research from the Kellogg School of Management at Northwestern University and the University of Rochester.
Current pension assets for plans sponsored by Philadelphia can only pay for promised benefits through 2015, while Boston and Chicago would deplete their existing funds by 2019.
Cincinnati, Jacksonville, Florida and St Paul have current pension assets that can only pay for promised benefits through 2020.
Local governments use unique accounting methods that many, such as Mr Rauh, believe understate obligations. Based on his estimates, which use US Treasuries as the benchmark, each household already owes an average of $14,165 to current and former municipal public employees in the 50 cities and counties studied.
Oh but those public unions are due all there money.
Forget about it. They will get sent to the federal program and receive pennies on the dollar. We can't afford the bill.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
This is exactly why Unions should be outright banned from Government offices. They create an atmosphere of greed and entitlement that is found nowhere else.
In the private sectors, this greed is mitigated by market forces, not so with the Government.
The OK teachers retirement system will start to go belly up in 2019 because our politicians refused to live up to their promise. Rather than put money into the teachers retirement system as mandated by law, the pukes gave tax cuts.
The OK teachers retirement system will start to go belly up in 2019 because our politicians refused to live up to their promise. Rather than put money into the teachers retirement system as mandated by law, the pukes gave tax cuts.
BS falcon, that's hardly the case. Citizens don't exist to pay for lavish benefits promised by politicians who knew they wouldn't be around when the time came. They only cared to pay attention to the moment and get elected. We the public shouldn't have to live up to those promises and the public employees should have been smarter to realize it wasn't going to be there. It's crazy to think someone in a gravy job can work for 30 years and expect someone else to pay their bills.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
I checked the linked article and it didn't state reporting requirements for public pension funds.
In California (I don't know whether other states do this or not), the state law covering pension reporting requirements makes cities and counties report "complete" pension funding liabilities as if every single public employee was retiring today. This means the kid they hired last week along with the employee getting ready to retire next week and every single other employee.
In California (I don't know about other states), an employee can attain maximum retirement benefits in 30 years if they are a public safety employee (as if firemen, prison guards & cops, etc.) or take as long as 45 years to obtain maximum retirement benefits for non-safety employees (all other employees).
As you might guess, this reporting "requirement" tremendously inflates the total pension funding obligation requirement for cities and counties in California. It doesn't mean there aren't issues that need to be fixed (like the city of Bell, etc.) BUT reporting requirements like this make it difficult to accurately assess the problem. It's kind of like asking can you afford to buy your house with 100% cash (of course not) when it's far more manageable to pay for it over a standard 30-year mortgage (which most people can afford).
I am not trying to comment knowledgeably on Chicago's pension liabilities because I honestly don't know the specifics like this. I am aware of California's ridiculous pension reporting requirements, however, and can't help wondering if other states have such ridiculous laws that make it difficult to accurately assess the situation and determine how much, if any, problem does exist.
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Well, if more states were like Wisconsin and kept the money and invested it like a pension fund is meant to be, then there would be no problem.
Many states allowed the pension fund to be robbed for other purposes which caused the shortfall. The lack of planning on their part caused the problem. The politicians of those states should lose their paychecks and benefits until the money gets paid back in full.
I'm not aware of any different reporting requirements in California vs Wisconsin, but all managed pension funds should have the ability to accurately report back as to who has what for all members of the pension fund. It's a matter of the software used to track the funds, and report the balances. The only way extra cost would be attributed if California was paying a company to develop the software, and maintain that software, every year.
I find it hilarious with the number of public employees that support Obama. What to look at where their pension money went? Right to the rat hole of GM and Chrysler. When Obama used his heavy hand and the power of his office to denying the rightful owners of those 2 companies from exercising their rights under contract law, he screwed the unions. There were slot of public pensions that lost their shirts in that deal.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Honorable Husband, who is a CPA and had his own practice before he quit and went to law school, tells me that governmental accounting is a very strange animal, different from generally accepted accounting principles, and the method leads to many of the problems that governmental units are having. He refused to come on here and explain anything because he says he is just not familiar enough with that area.
Maybe someone who is could throw some light on the subject.
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Proud parents of our own "Daddy's Little Girls"
I heard Jesus He drank wine and I bet we'd get along just fine.
Well, how the government handles money is indeed a bizarre setup to say the least.
The only thing that should have been done for pension funds was to treat it like a seperate entity altogether and run it like 401Ks are now.
It really comes down the money not being left alone (spent for other reasons) and then not being managed properly for the intended purpose.
I only have experience in Wisconsin, and the state has one entity that handles all retirement funds for public employees. I do not know if the other states are set up similarily, or if each city/county has to manage the pensions on their own.
Oh, and the article isn't correct with the assumption that the pensions are unfunded. Without knowing what policies in place, we can't assume that each of the surveyed places does the same thing. In almost all cases that I am familiar with, the wages have X percentage taken out of the salary to be put into a pension fund. Seeing as the practice of setting aside money into a retirement account has been the common place practice for decades I'm making an educated guess that this is happening now. Making that assumption is relatively safe, otherwise how would anyone know what type of pension benefits they would end up with?
So, two questions come to mind. What is done to collect the pension funds, and how are they (mis)managed? Answering those two questions will provide insight as to why the problem of missing retirement funds has occurred in certain places.
US Cities And States Unfunded Pension Liabilities
