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Author Topic: Spring fun -- legislators and governors attacking pensions  (Read 36378 times)
questor1
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« on: April 13, 2011, 7:51:07 PM »

How is it in your state? Rough in mine, not over until May, right now still in the talking stages, but it will be bad, very bad, for all state workers including college personnel.
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michigander
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« Reply #1 on: April 14, 2011, 10:23:13 AM »

While the discussion is not as ugly as in some other states like Wisconsin, all public employee benefits are under attack in Michigan in one way or another.  There are initiatives to make people pay a larger percent of the cost of their benefits and others to reduce them.  There is a new law which would empower emergency financial managers of municipalities and school districts to void union contracts.  Michigan is a rare state in that retiree pensions aren't taxed as income.  Under a recently passed tax law, that's going to change though the details are still being worked out.
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civilprof
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« Reply #2 on: February 04, 2012, 2:47:48 PM »

Let's be honest.  Some teacher pension plans (and this varies from State to State) are incredibly generous, and plainly are unsustainable.  My state pension will provide me with more than $100,000/yr until I die.  Pretty sweet. I'm looking forward to laying on the beach, hauling down more in retirement than 90% of the active work force.  Is this any reason to resent me?  (A:  Yes)
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clean
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« Reply #3 on: February 16, 2012, 6:54:45 PM »

Many state plans are underfunded.  If we extrapolate from business, then states will cancel the current plans and move to defined benefit plans (where they put some percentage of your wage in an account and you decide how to invest it and can retire with whatever you earn). 

In some versions of the future, the current system of retirement enjoyed by the prior generation (whatever that means) will no longer exist.  Income for life is probably on its way out as a retirement plan.

IF you want to worry about some things, look to see what happened to pilots of Eastern Airlines or the one that went bankrupt lately (whose name escapes me).  They were promised "lifetime" payments... but the lifetime was the life of the company, not the life of the retiree.
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"The Emperor is not as forgiving as I am"  Darth Vader
pigou
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« Reply #4 on: February 17, 2012, 12:58:14 AM »

Clean: I think you mean defined contribution plans, not defined benefit. I do agree that this is the direction we're headed, and I'm quite happy about that. Nobody has as much of an incentive to provide for my retirement than I do. Note that this is very different from privatizing Social Security. The purpose of the latter is to guarantee a minimum standard of living necessary not to end up on the street. There's good reason to avoid the risk of market returns there. However, one can certainly afford to take some risk in a retirement savings account. Given the great tools available for long-term investing today, it is trivial to assemble a globally diversified and low-cost portfolio. One can, for example, simply pick a Vanguard Target Retirement Fund and be done with it. Personally, I think they're too conservative - particularly if "savings" in SS are considered part of the portfolio (i.e. an annuity), which I think is generally considered entirely separate. Nonetheless, for someone who doesn't want to think about the details of investing, it can be extremely simple.
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larryc
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« Reply #5 on: February 17, 2012, 1:20:03 AM »

I left Missouri vested in a non-transferable pension plan there. I wonder if I will ever see any of it?
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clean
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« Reply #6 on: February 17, 2012, 3:07:03 AM »

Quote
Clean: I think you mean defined contribution plans, not defined benefit.

Yep, mistyped.
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"The Emperor is not as forgiving as I am"  Darth Vader
burnie
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« Reply #7 on: February 17, 2012, 12:33:23 PM »

I left Missouri vested in a non-transferable pension plan there. I wonder if I will ever see any of it?

Non-transferable?  That stinks.  You'd think they'd let you roll it to an IRA just to get it off their books.
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