A $76,000 Monthly Pension: Why States and Cities Are Short on Cash • Hacker News Board

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#261

Post by jakelarkin » Sun, Apr 15, 2018, 10:30 PM UTC

Consultant32452 wrote: post #185

jakelarkin wrote: post #135

Earlier quoted context omitted.

is it humane or an entitlement? most people in the private sector work their whole life never get anything remotely close to a pension secondly, its just an intergenerational wealth transfer. another excess of the selfishness of the boomer generation. Who will pay the price ... the school kids getting a crap education in 35 student classrooms in crumbling buildings in a towns who's infrastructure is going to literall…

>most people in the private sector work their whole life never get anything remotely close to a pension How do you feel about annuities? They can function very much like a pension. Why do you think most people choose not to buy them?

I don't really know that market but assume theyre not more popular because the companies that sell them charge high embedded fees, and also a very high risk premium? Similar to whole life insurance.

Anyway, the crux of the problem its very difficult walk the line of having institutions that safely guarantee massive financial payouts 50+ years into the future. From the perspective of the seller its an asymmetric risk. We can't even accurately predict the yield on government bonds 5 years from now.

The logical thing would be to phase in mandatory 401k contribution and healthcare savings accounts with fixed amount in high-rated bonds. But that might put a dent in the ability of Coca-Cola/Disney/Comcast Co. to suck the American consumer dry so its probably a no-go in our political environment.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#262

Post by tptacek » Sun, Apr 15, 2018, 10:33 PM UTC

ubernostrum wrote: post #178

tptacek wrote: post #119

Earlier quoted context omitted.

The median annual cash compensation for a teacher in my kid's public high school district in Illinois is six figures. I know that's not true of teachers in other states; Oklahoma teachers look like they're getting shafted. But in Illinois, where we have a public pension crisis, I don't have trouble coming up with evidence that public sector employees did not make cash comp sacrifices for their defined-benefit pension…

What were the teachers in Illinois making a couple decades ago?

I’ll ask my mom. I’m much much more concerned with current comp than comp 2 decades ago.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#263

Post by scarface74 » Sun, Apr 15, 2018, 11:06 PM UTC

humanrebar wrote: post #259

scarface74 wrote: post #220

Earlier quoted context omitted.

From the article: The most common cause of death on the job were intentional shootings, which claimed the lives of 46 officers last year. Almost as many officers died in car accidents. Only 46 actually died from intentional shootings.

So some officers are murdered and others die from traffic accidents. I'm not sure why that makes the job less dangerous.

How is a police officer getting killed in a car accident any different than anyone else getting killed on the roads?

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#264

Post by Pinckney » Sun, Apr 15, 2018, 11:11 PM UTC

scarface74 wrote: post #263

humanrebar wrote: post #259

Earlier quoted context omitted.

So some officers are murdered and others die from traffic accidents. I'm not sure why that makes the job less dangerous.

How is a police officer getting killed in a car accident any different than anyone else getting killed on the roads?

Police spend more time driving than the average person, due to the nature of the job. Writing tickets on the side of the road is also hazardous. The job increases their risk of dying in a car accident.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#265

Post by humanrebar » Mon, Apr 16, 2018, 12:20 AM UTC

scarface74 wrote: post #263

humanrebar wrote: post #259

Earlier quoted context omitted.

So some officers are murdered and others die from traffic accidents. I'm not sure why that makes the job less dangerous.

How is a police officer getting killed in a car accident any different than anyone else getting killed on the roads?

It's not. But local governments don't hire a lot of deep sea fishermen, so they don't get hazard pay that affects local budgets.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#266

Post by toomuchtodo » Mon, Apr 16, 2018, 12:22 AM UTC

gbacon wrote: post #98

ubernostrum wrote: post #73

Earlier quoted context omitted.

It's impossible to reform pensions without paying private-sector market rate to state and local employees. "Unsustainable" pensions are a politician's way of punting the issue -- rather than hit the budget today by paying market rate, they promise far above market rate later on when some other sucker is in office. And everybody -- including the people whose taxes will end up paying for it -- falls for this over and o…

Compensation is a vector. Government employees are much more difficult to terminate than their counterparts in the private sector. That is, government employees are compensated in part in strong job security.

That's a problem with at-will employment law though, not government jobs. Government job security should not be considered compensation.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#267

Post by acdha » Mon, Apr 16, 2018, 1:46 AM UTC

paleotrope wrote: post #260

acdha wrote: post #256

Earlier quoted context omitted.

That leaves out the other side: who agreed to the deal and dishonestly pretended magic free money would pay for it? The unions didn’t force the state to make tax cuts below fiscally prudent levels.

When one party is funded by the public service unions, and they are in power, what do you think is going to happen.

> When one party is funded by the public service unions

At least in the U.S. we don't have parties which are funded by unions. The unions contribute, and get out the vote, but that's rarely uniformly going to one party which gets a veto-proof majority everywhere. You see divides — e.g. the teachers unions lean Democratic but the police, firefighters, and prison guards lean Republican — and a lot of local politics showing counterexamples for any of those trends.

It's also not really the point I was interested in, namely that several generations of officials choose to cook the books so they could make politically popular moves without raising taxes or even cutting them. This is not a problem specific to pensions and it's definitely not limited to a single party as e.g. three decades of Republican magical thinking about tax cuts paying for themselves should demonstrate.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#268

Post by sgc » Mon, Apr 16, 2018, 4:00 AM UTC

tedsanders wrote: post #118

sgc wrote: post #62

Earlier quoted context omitted.

Actually most of the money that is borrowed (approx 90% AFAIK) is invented and injected into the economy. You borrow against the future because this new creation of currency must later be paid by labor or investments.

In my conceptualization, money is not the thing that is borrowed. Money is just the measuring stick. What's actually borrowed is the stuff bought with the money. And that stuff is made in the past or present, not the future. For example, imagine I take a loan to buy a house. The people who built the house invested their labor with the expectation of future payment. Or if they spent their wages, then the firm that fro…

The entire economy is a system designed to encourage human activity, and is not based in truth of value. That builder borrowed the funds to build. It actually is turtles all the way down to the Central Bank, which dictates that money exists.

Controlling assets is not the same thing as consuming, and money is designed to designate control rather than consumption. I can borrow money to buy stocks, which are nothing more than a promise of a corporate future. etc. People and entities do not have control because they have produced, but because they have controlled, or are part of the system that magnifies control to create more of it (through the banking system).

We elect to accept this system of the government determining who can control assets based on a vision of human society, or simply because we cannot object in a meaningful way. We borrow almost exclusively from money created by the government. In the end we borrow from nobody, but borrow by means of a de facto authority. The mutual agreement of human wills is more powerful than any sort of temporal precedence.

In that sense we borrow from neither the past nor the future. Of course you are correct that a large portion of borrowed funds are used to control tings that have already been produced. But the money is created at the same instant the loan is made. And it must be repaid by future labor or returns. Since it is not necessary for the money to be used to purchase something that already exists (and another large portion of borrowed funds are used for futures of myriad kinds), but it is always true that future results must be used for repayment, I think it is more accurate to say we borrow from the future.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#269

Post by someguydave » Mon, Apr 16, 2018, 4:10 AM UTC

ebbv wrote: post #248

someguydave wrote: post #212

Earlier quoted context omitted.

There is one retirement fund that isn’t a pyramid scheme: the kind where the retiree saves in his own account and faces investment risks like everyone else. Forcing taxpayers to shelter you from risk is slimy, even if you have a “negotiated agreement” signed by some politician.

You realize 401k programs at most companies are treated as a pool just like pension funds right? The difference is politicians had domain over the pension funds and decided to "borrow" from them and make them insolvent. The workers are not the ones to blame, the politicians who thought using the pension funds as a piggy bank are. Stop blaming the workers. They didn't cause this problem, and they paid into those retir…

>You realize 401k programs at most companies are treated as a pool just like pension funds right?

That's false. One of the requirements of a qualified plan under section 401 is that the employee has a nonforfeitable right to plan benefits: https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-...

The corporations who tell workers that the corporation can take money out of employer 401k plans without authorization are trying to scare the workers, stop being their patsy.

>The politicians who caused the problem are the ones who want you to blame the workers, stop being their patsy.

The workers should have known that future promises to pay which would drive the government into insolvency were promises made in bad faith. This doesn't absolve the politicians of their sins, but the workers are not innocent lambs either.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#270

Post by ebbv » Mon, Apr 16, 2018, 11:46 AM UTC

someguydave wrote: post #269

ebbv wrote: post #248

Earlier quoted context omitted.

You realize 401k programs at most companies are treated as a pool just like pension funds right? The difference is politicians had domain over the pension funds and decided to "borrow" from them and make them insolvent. The workers are not the ones to blame, the politicians who thought using the pension funds as a piggy bank are. Stop blaming the workers. They didn't cause this problem, and they paid into those retir…

>You realize 401k programs at most companies are treated as a pool just like pension funds right? That's false. One of the requirements of a qualified plan under section 401 is that the employee has a nonforfeitable right to plan benefits: https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-... The corporations who tell workers that the corporation can take money out of employer 401k plans without authorizati…

Again you keep talking like insolvency was inevitable. It wasn’t. It happened because politicians misused the funds.

I’m bored of arguing with you though. It serves no purpose because you are just regurgitating right wing talking points.