Pension Fund Losses: To Infinity And Beyond!

[PromiseLandAkitas]

http://housingstorm.com/2009/10/pension-fund-losses-to-infinity-and-beyond/


..."Public Employee Pension Funds will need to cut benefits in the near future. They are bleeding billions of dollars and are left with few options other than doubling-down commercial real estate and other bad bets that they’ve already made. Make no mistake, pension funds are throwing a “hail-mary” passes to avoid either a taxpayer bailout or massively cutting benefits"
...

[Bruce]

 Can't find a link anywhere but I've heard that the Florida's teachers retirement system is in real bad shape. I have no doubt our Government will try to bail these retirement plans out and that will PISS me off. We should have NEVER bailed out Wall Street or GM, Chrysler, AIG or Fannie and Freddie, etc.etc.etc. This insanity has to stop which is the very reason they will keep doing it until it all goes KABLOWEE.................................Bruce

[mtlouie]

They were talking about how bad Montana's public pension funds were four years ago.  I really doubt that it's gotten any better.

[Six Gun Jim]

If the pension funds tank people will never look at working for the gubmint as a good thing again. Seeing as how I'm going to get zero retirement based on the actions of the last few generations my sympathy is a little low. I hope they tank, it helps defeat the federal carrot and stick routine that is a giant lie anyway. Everybody else is taking a fucking so why should the government pensions be any different?   

[mtlouie]

"They pretended to pay us, and we pretended to work."

Coming to a country near you very soon.

[vision-master]

http://housingstorm.com/2009/10/pension-fund-losses-to-infinity-and-beyond/


..."Public Employee Pension Funds will need to cut benefits in the near future. They are bleeding billions of dollars and are left with few options other than doubling-down commercial real estate and other bad bets that they’ve already made. Make no mistake, pension funds are throwing a “hail-mary” passes to avoid either a taxpayer bailout or massively cutting benefits"
...

Most are protected by law and the taxpayer will have to make up the difference.

[yellowrocker]

Most are protected by law and the taxpayer will have to make up the difference.

Unless the govt changes the law because they are broke. Nothing is certain.

[vision-master]

Most are protected by law and the taxpayer will have to make up the difference.

Unless the govt changes the law because they are broke. Nothing is certain.

They are going broke. I'm collecting from a basic plan right now that will be flat-broke within 7 years. Most of these ppl, never paid in SS (bc it was a 30 years and out program) and are NOT eligible for any social security benefits PERIOD! The plan was closed to new members after 1978.....

[donk]

Quote from: yellowrocker on Today at 01:39:12 PM
Quote from: vision-master on Today at 01:17:46 PM

Most are protected by law and the taxpayer will have to make up the difference.



Unless the govt changes the law because they are broke. Nothing is certain.


They are going broke. I'm collecting from a basic plan right now that will be flat-broke within 7 years. Most of these ppl, never paid in SS (bc it was a 30 years and out program) and are NOT eligible for any social security benefits PERIOD!

I work in the industry, I would be surprised if it is not already flat broke.  It all depends on how the "assets" are valued....a lot of the ones that SHOULD be valued at zero will not actually be valued correctly until they try to sell them, if they even bother to try.

[vision-master]

The State has been putting money into this plan since the 70's. One reason it is going broke is bc the City 'closed' the plan to new members after 1978.

The 90-year-old Minneapolis Employees Retirement Fund (MERF) is paying retirees about $155 million annually, with assets of just under $800 million, plus any investment gain, to finance those benefits.

MERF covers city employees who were hired before 1979, so it has 4,600 people drawing pensions while fewer than 200 are still working. The crash in investment markets has cut MERF assets almost in half.

Fun, eh. 

Hopefully it will last long enough for me to pay off the house. That benefit payment is my house payment.........

[kats]

NY says shortages to the state pension plan are made up by local governments. Who have no money. So they try to raise property taxes and then they have even less money... Doesn't look good either way.

[Jeromie]

kats,  the states and individual companies  are both under an obligation to provide a deferred benefit of X. Part of a contractual employment agreement  where the employee has already fulfilled has part of the contract  by providing the services under the contract.   
The contract  , ERISA and so forth , provide for payments to a Defined Benefit Plan for investment to meet the contracted  obligation to the employee. If the payments and earnings are insufficient to meet the full defined benefit in the future the employer is on the hook.

Notice that the Defined Benefit Plan claims followed into the  New GM?    At all costs  the benefit must be politically delivered on.  These claims even follow an asset sold if the same business is conducted by the new  owners within five years of the sale.

By the way, the bonus liability follows the same facts. A contract where the employee has  fulfilled the obligation and the bonus owed must be paid to complete the contract. The only difference is that the bonus is not covered by pension liability law . It is covered by employment law.

These losses must be made good by the employers. Even bankruptcy will do nothing but insure that these plans get all the proceeds of liquidation up to 50 % of their allowed claim in bankruptcy.

[kats]

These losses must be made good by the employers. Even bankruptcy will do nothing but insure that these plans get all the proceeds of liquidation up to 50 % of their allowed claim in bankruptcy.

No matter what the law may say about liability here, I still don't see where they are going to find the money.

[donk]

Most are protected by law and the taxpayer will have to make up the difference.

Pensions (and 401k and executive comp and any retirement plan) ARE laws.  I am not as familiar with pensions, but 401(k) is way more obvious...it is a section of the tax code.  One piece of legislation and the whole scam ends...bye bye Corporate "obligations".

Even though we sell these plans as products, in reality all they are is loopholes built in to the IRS code supposedly for the benefit of the worker and corporations.  They have turned into quite the cash cows...complete with all kinds of side-rackets to kick some fees to this broker or that recordkeeper...because most people don't even realize their money is getting dumped into them (then into mutual funds, which are made up of equities--aka the stokc market).  

People who do the same thing I do have no idea or inclination to understand the enormity of these things, their imact on (and from) the market.

[Jeromie]

These laws are mainly outside the Internal Revenue Code. That is ERISA and MEPPA and others.  A 401(k) is not a defined benefit plan but a deferred  taxability of compensation arrangement.   There is also employment law at the state level that would kick in the moment Federal  supremacy kicked in from  repeal of Federal law.

Then politically repeal would be next to impossible especially after the last year.