GannonFan wrote:houndawg wrote:
You mean those retirees didn't put
their money into their pensions?
And by "welfare problem" you of course are including the billions in corporate subsidies?
If the pensions were fully, or even mostly covered by what was paid into them, then we wouldn't have a problem. However, a good chunk of most pensions come from the contributions that the states or other controlling government entity needed to put into them. In a lot of cases, those entities chose to allow themselves not to fully fund those pensions since the costs to do so in many cases were staggering. Of course, what was staggering when they were supposed to be funded is even more so now that we are, in some cases, decades behind funding them.
It also didn't help that in some cases, increases in pension benefits were done by lawmakers since they were voting to increase their own pension benefits along with the civil employees. In Pennsylvania, they increased the pension multiplier from 1.5 to 2.5 in the dead of night about a decade ago and it applied to all government employees - teachers, legislators, etc. Now a teacher can retire after teaching 30 years and pretty much get their final salary as their annual pension. Throw that in with continued access in retirement with a very generous benefit package, the guarantee of tenure for 97% of their working life, and the ability in some states (like PA) to have pension income excluded from state income tax, and it's a pretty sweet gig if you can get it, but not something that's very sustainable. Of course, my wife is a public school teacher and well along at this point to reap the benefits of this unsustainable system so I'm going to personally benefit from it (take that taxpayers! I got me a sugar momma!) but that doesn't mean it's the right system to have.
In regards to PA, just out today:
"
State auditor general calls for state action to help struggling municipal pension programs
In a report released today, state Auditor General Eugene DePasquale raised the alarm about distressed pension funds in Pennsylvania’s cities, townships and boroughs, which collectively fall $6.7 billion short of being fully funded.
Mr. DePasquale held a news conference this afternoon with Pittsburgh Mayor Bill Peduto, who is making pension reform a priority of his administration.
Citing Detroit’s historic declaration of bankruptcy last year, Mr. DePasquale warned that if the problem isn’t addressed, retirees and employees face the possibility of not seeing their full pension benefits.
“In Pennsylvania, for those municipalities whose pension plans have become so underfunded that the plans are rated as ‘distressed,’ the promised retirement commitments are at risk,” the report said.
Pittsburgh and Philadelphia account for three-quarters of underfunding among the 573 municipalities. The city’s pension fund is about 62 percent funded, with $380 million in unfunded liabilities, according to the report.
In 2015, accounting standards will change to require cities to list unfunded pension liabilities on their balance sheets. The change could make it more expensive for communities to borrow money and force them to raise taxes, the report said.
Mr. DePasquale’s report included several recommendations for state legislation that could ease the burden, including provisions to prevent employees from using overtime in the waning days of their career to boost their pension payments — which recently was put in place for Allegheny County employees — and creating a program for distressed municipal pensions that would include greater state aid.
At the news conference, Mr. DePasquale said it’s time for officials to address the issue at the state level.
“This is clearly a Pennsylvania problem and it’s not going away and it needs the action of the General Assembly ... and the governor,” he said."
http://www.post-gazette.com/local/city/ ... 1402260138" onclick="window.open(this.href);return false;
