Who cares about public pension liability? Well, you should – after all, it’s the reason entire cities and even states are facing bankruptcy. Joshua Rauh, professor of finance at Stanford and Senior Fellow at the Hoover Institution, paints a startling picture of just how broken the public pension system really is, and what will happen if we continue to ignore it.
15 Comments on Public Pensions: An Economic Time Bomb
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Which all started with public unions, an idea even FDR was strongly against.
Government and common sense – never gonna happen, till it falls down and goes crash
If the laws and regulations governing private pensions were applied to public plans, they would be bankrupt because they are not funded, and their administrators would be jailed for fraud. Public pension promises have been used for decades to essentially buy the loyalty and the votes of civil service employees, or their unions.
And the solution will be to take money from others so poorly thought out promises will be kept.
This is how it works in Chicago:
1) Create a committee and stuff it full of all your friends and relatives.
2) The only requirement of that committee is to meet 4 times per year, once a quarter.
3) The meeting requirement accomplishes only one mandatory task from all committee members: Raise your hand for role call or say “present” on the dial-in meeting.
The people on these committees get paid on average $100k each and are eligible, in many circumstances, for.. wait for it.. PENSIONS! For the rest of their life as long as they called into a conference call and said, “present” four times.
THOUSANDS of these types of committees exist in Chicago.
The state of Georgia has completely eliminated pensions for new hires. They are offered 401k’s, but the state doesn’t contribute anything to them.
The main attractions of public service for most people was job security, generous benefits, and pensions. The main drawback was that take home pay was usually substantially less than the private sector, so you had to accept a trade-off.
Today benefits such as heath insurance, pensions and paid leave are harder and harder to find in the private sector, especially if you don’t have a union. I wonder how many more state and local governments will adopt this tactic, and how long it will be before Georgia will drop health coverage and paid leave. Cut into those benefits too deeply, and public sector employment won’t be an attractive alternative to private sector employment.
Replace them with illegal aliens at minimum wage and no benefits.
And the courts protect them to the bitter end, on the taxpayers dime.
THAT IS INSANE! ECP
Can’t go on forever…
Public pensions are likely to be one of the two most problematic complications in this country.
Lazlo has a buddy who’s a cop. He’s about to retire.
Now his pension is at 90% of his current pay grade; 100+K
I don’t fault my friend, he earned his pension. He paid his dues.
The idiot who commits taxpayer monies for 90% pensions should be shot.
@jellybean October 30, 2019 at 9:19 pm
> Public pensions are likely to be one of the two most problematic complications in this country.
But not even a concern for the next.
@Lazlo The Elder October 30, 2019 at 10:22 pm
> I don’t fault my friend, he earned his pension.
> The idiot who commits taxpayer monies for 90% pensions should be shot.
There’s nothing wrong with having abortions. It’s performing abortions that’s an abomination.
I’d place a high priority on changing bankruptcy law for states and cities, and I’d call it the FU plan.
Govt pensions should be placed LAST on the list of priorities to be paid, in ALL cases – due to the way they have been used to buy loyalty for the very WORST politicians
Democrat Illinois made guaranteed funding part of the state constitution. It can’t be not funded. Now they’re broke, but it’s somehow all the Republican’s fault.