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Teacher pension timebomb awaits Ky. lawmakers – and so may you😰

I urge you to read this full story at the link below; its a depressing and unnecessary tale repeated throught the Country. “traditional pensions have proved unsustainable” .. what a joke. There are so many absurd statements in this article it is entertaining, but very sad. 

 Pension plans were sustainable for decades and decades going back as far as the 19th century. The pension plan I used to manage was started in 1911.  

What changed was the irresponsible management of such plans (especially states) and the simple lack of commitment to them caused in large part by accounting rules and government regulation and administrative costs… all having the unintended consequence of undermining retirement for tens of millions of Americans.   

There is no reason that a prudently designed and funded pension plan cannot provide a solid foundation annuity income (supplemented by 401k type savings and personal saving). 

We are creating such an intolerable retirement situation that sooner or later government will step in and the cost to employers will eventually exceed the cost of a traditional pension and they will have lost all control to politicians. A good pension plan costs between 8% and 10% of pay. Workers either won’t receive that in cash compensation or will have it taken in taxes. 

The state’s teacher pension fund has only 55% of the money needed to cover benefits during the next 28 years.

Republicans also argue that a new benefit tier for future hires and other structural changes are an essential part of any solution to help the system meet current obligations and avoid racking up more shortfalls. They say that traditional pensions have proved unsustainable in the private sector and that state government must follow suit to protect taxpayers.

Source: Teacher pension timebomb awaits Ky. lawmakers

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1 reply »

  1. There you go “prudently designed and funded”! Those who have such plans, including mine with a FTAP of ~140% are now subsidizing others who failed to fund their plans -teamsters, United airlines, etc. The new funding comes in the form of abusive and inappropriate PBGC premiums. Won’t be long before those with such plans head for the exits, purchase annuities after stopping accruals, to avoid legislative “solutions”.

    Simply, the problems with public pensions have NOTHING to do with private pensions. You can find the source of their problems very easily … Promise a lot to buys items, and hope for sufficient revenues to fund, or raise taxes.

    My pension plan design as of ERISA’s effective date is sustainable… Contributory, career average, no early retirement subsidy, etc. why not suggest KY implement something sustainable? Won’t buy votes!

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