Seriously, why should legislators receive lucrative retirements for part time gigs? Why can they opt out of the retirement systems they set up, force us to pay for and participate in and bankrupt? Why are we(who fund the accounts) not allowed to know what they receive? Aren't the Feds exempt from insider trading laws too? What a scam!
This would solve the states pension debt problem
- Thread starter TopCatCal
- Start date
The pension (particularly the KTRS) isn't underfunded because the state chose not to fund it. Over the past 12 years, the investment board responsible for the pensions have requested an amount to meet federal requirements based on expected investment returns, and the state legislature has fallen short of that less than $35 million total over 12 years. That's a drop in the bucket of $15 Billion.
The under funding is due to two issues: The Federal Government changed the rules for funding levels of pension products about 6 years ago, and caught a lot of pensions off guard. More importantly, the market performance of the funds the legislature contributed have performed terribly. the state has begun massively scaling back the anticipated returns on the funds, but that's reactive- if you expect funds to grow an average of 6% per year based on historical trends and instead they're flat over a 10 year period, you've already done the damage.
Pensions are funded based on tables- usually set by a combination of federal requirements combined with market expectations set by advisory boards.
The only issue with the legislature/governor in this is that they wouldn't or couldn't dump enough raw funds into the system to offset the horrid markets. But they never "underfunded" it due to lack of interest or responsibility- they've always given the pensions the money requested by the governing boards to meet their obligations. We're just coming off a decade of market performance that defied historical norms, and in the midst of it, the federal government changed the rules.
The under funding is due to two issues: The Federal Government changed the rules for funding levels of pension products about 6 years ago, and caught a lot of pensions off guard. More importantly, the market performance of the funds the legislature contributed have performed terribly. the state has begun massively scaling back the anticipated returns on the funds, but that's reactive- if you expect funds to grow an average of 6% per year based on historical trends and instead they're flat over a 10 year period, you've already done the damage.
Pensions are funded based on tables- usually set by a combination of federal requirements combined with market expectations set by advisory boards.
The only issue with the legislature/governor in this is that they wouldn't or couldn't dump enough raw funds into the system to offset the horrid markets. But they never "underfunded" it due to lack of interest or responsibility- they've always given the pensions the money requested by the governing boards to meet their obligations. We're just coming off a decade of market performance that defied historical norms, and in the midst of it, the federal government changed the rules.
This is partially accurate. The state has never reneged on the mandated percentage they are required by statute to commit. However, up until around 15-20 years ago (I don't have the actual date available), as part of the biennial budget cycle, the Appropriations and Revenue Committee would review the retirement actuarial report and contribute additional funding if the actuarial showed a shortfall. The state stopped making the additional second contribution and viewed it as a non-required expenditure during lean budget years which has contributed significantly to the pension issue now being faced.
True ... if you somehow consider contributing a fraction of the ARC for many, many years as fully funding. I'd have to look it up but I don't think the state met the KRS board actuarial contribution rate from 2003 to 2013(with most of those years only having a small percentage of the actuarial contribution). Tough decisions should've been made 15+ years ago but that just didn't happen.
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In the end whether it was market forces, poor management by the pensions, inadequate contributions by the participants, or choosing to fund the legally required required but insufficient amounts by the employer, or people just living longer, the politicians have allowed this to happen. For some time they have known full well the only solution involved painful choices with some combination of increased contributions from participants, or more contributions from the state by way of higher taxes, or decreased benefits, but instead done "studies" to avoid making those choices so as not make the voters mad. All the while making sure their pensions, for a part-time job, were fully funded with the amounts kept secret.
To me, in there simplest form, pensions are antithetical to freedom......of choice, market or the notion that someone else should PAY for someone else's retirement. Pension's are dying dinosaurs from Marx. anything that is based on a guaranteed rate of return--that often exceeds a market average--is a faulty premise to begin with.
yes that is correct
hubby worked for DOC for a total of 25 years - he retired the first time just after 20. (right before they changed the rules). Believe it or not, that's an incredibly stressful job, you make it 20 years you're doing well.
I've got a bit of a different take on the pension issue. I'm a soon to be TRS of Kentucky pensioner, 27.75 years vested and 3.25 more years remaining until retirement. When I was hired 28 years ago, high school friends who passed on college and went into manufacturing jobs chided me constantly about what a fool I was. I had $15,000 of student loan debt (which seems tiny compared to today) and a professional job starting at $14,000 a year, along with what they demeaningly called average benefits. Their compensation was better than mine. They had better health care coverage. Their 401K was employer matched and was earning returns that would outperform my pension at retirement. I never heard any of these folks complain back then that public pensions and benefits were unsustainable. Why? Because the private sector was doing better than the public sector across the board. Fast forward 28 years and a lot has changed. Due to public policy that's been detrimental to the private sector and manufacturing specifically, public work compensation is at least on par with a lot of private sector pay and health insurance and retirement benefits are better. And, who's complaining? Those same friends who laughed at my career choice 28 years ago.
oh just shoot the damn bunny [laughing]Say that word again...just give me a reason
KY pension plan is just one of many state, local and municipality pension plan in trouble. Many are underfunded. Part of it is because, politically, it has always been easier to offer more generous retirement benefits vs. higher salaries to public employees. Part of it is 'tale wagging the dog', i.e., politicians can't afford to vote to slash benefits/salaries when it's the public employee union members who've voted them into office. Part of it is the willingness of politicians to accept unnaturally high assumptions regarding investment returns so the required contribution is less. It's a mess that, one day in the near future, is going to bite a whole bunch of folks in the butt. At least a couple of cities in CA have declared bankruptcy in the past few years due, in part, to the exorbitant salaries, benefits, retirement and (especially) retiree healthcare benefits provided.
BTW, studies have cited one of the benefits that public employees enjoy that privates ones don't and it doesn't actually cost the government any cash is the difficulty in firing a public employee. With very few exceptions, job security for public employees is light years better than for private ones.
BTW, studies have cited one of the benefits that public employees enjoy that privates ones don't and it doesn't actually cost the government any cash is the difficulty in firing a public employee. With very few exceptions, job security for public employees is light years better than for private ones.
Which means that a firefighter who joined up at 18 is eligible for full pension at 43. Just unacceptable anymore.
Precisely what I've been saying for years. It's like I've been a lone voice in the wilderness talking about this. But I've finally found someone that agrees with me. Thank you 3 fan. I have never understood why non government workers are not enraged by this.