quote:

Originally posted by rburg:

Many were "earning" as much in benefits as they were in wages. .

Change the "Many" to "Some" and you're spot on.

There's "Some" here that are "special". Take, for instance our former mayor, the studdering prick, Lil Dick Daley.
He was a State Senator for a hot minute. So he gets a pension from the State.
He was the Cook County States Attorney. So he gets a pension from the County.
He was Mayor of the City of Chicago.
So he gets a pension from the City.

Then he surprisingly lands a job with a law firm that negotiated the parking meter fiasco that nets him a few million a year.

There's the few that are connected, they get all the meat on the table.
The dumbasses, the workers, the legitimate guys (and girls) that are trying to earn an honest living being a garbage man, a fireman, a city electrician, a paramedic.... The scraps on the floor.

There's people I know personally that get pensions from two city departments.

When I become King, you get to PICK ONE. That's it. No double or triple dipping into pension funds.

quote:

Originally posted by CPD SIG:

quote:

Originally posted by rburg:

Many were "earning" as much in benefits as they were in wages. .

Change the "Many" to "Some" and you're spot on....

If you change the story to most gov't employees in CA, you go back to "Many". Assuming the retirement investment portfolios earn ~4% annual return, the CA state public pension unfunded liability is around $1 Trillion. Using present value measurement and demographics, CA will owe (promised to pay) $1 Trillion more in retirement benefits than the money they will have to make such payments.

In the long term, other than inflation, there are only two solutions, pay less (which will cause a revolution of all public employees) or tax more (which will continue drive people out of CA). Borrowing money to pay pensions only makes the hole larger and deeper.

quote:

Originally posted by Scoutmaster:

In the long term, other than inflation, there are only two solutions, pay less (which will cause a revolution of all public employees) or tax more (which will continue drive people out of CA). Borrowing money to pay pensions only makes the hole larger and deeper.

The Great Carnac predicts California will:

Pay nothing to the retirees
Seize all the private sector has
Give illegals voting status

Illinois is now considering taxing private retirement funds, 401Ks/pensions/IRAs, to pay for Illinois public pensions!

Talk about accelerating the mass exodus of people fleeing Illinois. If this happens it will accelerate our plans to leave for Tennessee.

The new $15 hour minimum wage is also going to cause a lot more businesses to leave also. Brilliant.

https://finance.yahoo.com/vide...ement-164356321.html

Also.

https://www.illinoispolicy.org...an-taxpayer-incomes/

State spending outruns Illinois incomes

Illinois lawmakers have been on a spending spree. State spending per capita grew 48 percent faster than Illinoisans’ personal income per capita from 2007 to 2017.

Got absolutely no sympathy. All of this has been occurring for decades. The corruption, the fiscal incompetence. The fine citizens of IL (and Chicago) voted to continually keep these jackasses in office.

quote:

Originally posted by darthfuster:

quote:

Originally posted by a1abdj:
If the left thinks taxes are the answer, then I would suggest taxing leftist at 100% until things have corrected.

One way or the other, that solution would solve the problem. More money or fewer Leftists.....Brilliant!

Except the leftists will move to a red state and screw up that state without realizing it’s their leftists ideology.

quote:

Originally posted by SIGSense:
Got absolutely no sympathy. All of this has been occurring for decades. The corruption, the fiscal incompetence. The fine citizens of IL (and Chicago) voted to continually keep these jackasses in office.

Yeah, but there are good people like grumpy1 and many others who are stuck behind enemy lines.
They didn't vote for this, but they will reap the whirlwind.

This is a sinking ship. If you live in the city, don't complain when you get wrecked. The writing is on the wall folks. I would uproot my entire family and leave any city/state that is on the verge of default.

There are two ways out of this kind of mess:

1) cut benefits and stiff the pensioners.

2) continue to try and bleed the tax payers dry slowly even though there isn't enough money in them to cover it.

That's it. I've been saying on this board for years, if you have a defined benefit pension and plan on keeping it...make a new plan! There simply isn't enough money to make these things whole.

Chicago can try to raise taxes, but all they'll really do is drive money out of their city and state.

The only way out of this is to cut benefits. Cities and states who do that will survive (same with private defined benefit plans). Those who don't will only make the inevitable slower and more painful.

quote:

Originally posted by chellim1:
Yeah, but there are good people like grumpy1 and many others who are stuck behind enemy lines.
They didn't vote for this, but they will reap the whirlwind.

There's always going to be innocent, hard-working, law-abiding people caught up in these situations. That is how America works; we VOTE the crap out of office. Did I like the fact that a Muslim was elected President? No. What can I do about it in the future? Ensure that I continue to VOTE where my beliefs are aligned with classic American Republic (correct...America is a Constitutional Republic, NOT a Democracy) values. morals, and beliefs.

I was rewarded when Trump was elected. I voted for him, as well as many other citizens.

And then the creditors sue the state, likely in federal court. Since there's no way to discharge the debt, it's enforceable, so the federal court will enforce it. The state doesn't have the income to pay it? The court orders them to raise taxes. And they're right back where this all started.

quote:

Originally posted by chellim1:

quote:

Some here keep tossing out the “default” word. Neither Illinois, nor any other state can default. There is no legal process in place to allow it.

When they stop paying their obligations, they are in default. It doesn't really matter that there is no bankruptcy process for a State. It can still default.
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quote:

When they stop paying their obligations, they are in default. It doesn't really matter that there is no bankruptcy process for a State. It can still default.

Eventually you run out of other people's money.
The City of Detroit went bankrupt. The City of St. Louis should as well.
While it's true that there is no bankruptcy process for a State... it may not always be true.
Congress can change that and may have to.
The rest of the country is NOT going to bail out Illinois, and eventually New York and California.

Pension law is very specific. It's not like normal bankruptcy. There is something called the PBGC (Pension Benefit Guaranty Corporation).

Simplified version, any pension that cannot pay out to retirees is backed by the PBGC...that is the PBGC picks up the shortfall. Again, I'm way over simplifying, but you get the gist.

The fed .gov is in charge of the PBGC. They know good and well that there isn't enough money to cover all of the unfounded liability in pensions across America. As such, the feds are making it easier and easier to cut benefits to current retirees. They know this is the only way out.

This has been moving in this direction for years. Both the dems and repubs know this is necessary.

Again, long story short, the gov is basically saying that plans can cut benefits to existing retirees as low as 10% ABOVE what the PBGC guarantees. So basically, if the bottom the PBGC will pay is $1,000/month, you can cut your plan's benefits to as low as $1,100/month and it's legal. Pensioners can force insolvency and get the $1,000 from the PBGC, or they can accept the reduced $1,100. They've made it so pensioners will take a shitty deal that is still better than having the PBGC pay. They've insured they don't bankrupt the PBGC. It's actually really smart, but most pensioners don't understand this is happening.

Without this legislation that was passed a few years back, you couldn't reduce benefits to existing retires. So you see the game here? The federal government has given industry the tools to get out of this problem, but the pensioners are going to get hit very hard in this.

I sit on a board for our industry and we have a lot of pensions (union construction), so I've gotten a crash corse in pension law and issues.

Chicago politicians have two choices, admit defeat and cut benefits, or get elected promising to find the money...even though it's impossible and take their city down the tubes. Anyone who really tries to fix this won't get elected because someone will always be there to campaign on not reducing benefits. Chicago is screwed as they won't do what needs to be done so they can stay in office. Get out while you can.

Also, if you have a defined benefit pension...you're in deep shit friends. I would highly recommend anyone with a defined benefit plan work to convert it to a defined contribution plan.

The PBGC does NOT guarantee state or local pensions.

https://www.pbgc.gov/wr/find-a...gc-protects-pensions

Correct. Thank you for pointing that out. I was focusing on the act of congress that allowed cutting benefits, and that pension law is not like other forms of insolvency. It's the only out; it's basically what Detroit did. It will happen or the City dies IMO.

AFAIK states can just walk away from their pensions, at least under federal law. Local government pensions are regulated by their state.

However, many states have constitutional provisions preventing this. And, of course government employee unions are generally very politically powerful at the state level. So doing so rarely happens. It will be interesting to see how this holds up as the pension funding crisis snowballs.

quote:

It's the only out; it's basically what Detroit did. It will happen or the City dies IMO.

Yes.

quote:

However, many states have constitutional provisions preventing this. And, of course government employee unions are generally very politically powerful at the state level.

Yes.
The problem is the Illinois law...

Reaffirming their position that benefits once granted can never be “impaired or diminished,” the Supreme Court struck down the Legislature’s modifications as unconstitutional.

Justices illustrate Illinois' pension problem
https://qconline.com/opinion/e...0b-badd07745e04.html

quote:

Originally posted by gearhounds:

quote:

“New taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes."

I laughed. I really did.

Don’t they realize that taxes paid are on the value of the house which will be driven down. So in essence as the % of tax goes up it drives the value of the houses down so you don’t end up with near the added money they think they will while also screwing current residents with ruining the value of their house.

Brilliant

quote:

Originally posted by BBMW:
AFAIK states can just walk away from their pensions, at least under federal law. Local government pensions are regulated by their state.

However, many states have constitutional provisions preventing this. And, of course government employee unions are generally very politically powerful at the state level. So doing so rarely happens. It will be interesting to see how this holds up as the pension funding crisis snowballs.

Illinois has this and from what I have read Illinois can not cut any promised pension benefits unless the state constitution is changed though if the state goes bankrupt I have no idea what happens. If they try to unload this on the taxpayers in Illinois it is going to be mass exodus time for working families while the welfare breeders stay and get more political power. It is really bad already as property taxes keep going up and property values are stagnant or decreasing and it will only get much worse as the glut of homes increases. If I had my way we would be out of here within 6 months no matter how low we would have to sell our home for (which is paid off) but wife is still working and has family here but at least she is talking about possibly looking for pharmacist job in the areas of Tennessee we like.

quote:

Originally posted by CPD SIG:
When I become King, you get to PICK ONE. That's it. No double or triple dipping into pension funds.

I agree with most of what you said. However, (and this is coming from someone with _no_ pension), it would seem only fair that a person who puts in twenty in the military and earns a pension, then gets out and puts in another twenty somewhere else where that would result in pension eligibility get both pensions.

To me, there are two problems: Eligibility requirements and that public pensions even exist.

Eligibility: if pensions are going to exist, someone who serves twenty years probably ought to be eligible, but some [expletive deleted] politician who serves a few minutes should not be eligible. In fact I’d go farther and say there should be no pensions for politicians, regardless of how long they serve. Politicians should serve the public briefly, then go back to real life. Giving them pensions only encourages them to stay.

Public pensions: This is just another way to kick the can down the road, something politicians do too darned much anyway. If public pensions were outlawed and public agencies could only provide defined contribution plans (I think it is 403b, but whatever the name is, the analog of private companies 401k plans) they wouldn’t be able to make future promises, they would have to pay now, not pay some now and promise more later.

Obviously, outlawing pensions would apply to new hires. Some sort of workout would be required for retirees and existing employees who hired on with the promise of a pension. Math says employees and retirees will never get what they were promised, but just wiping out everything isn’t going to fly.

It's going to take some creativity to get around that opinion for sure, ouch! Illinois Supreme Court didn't do y'all any favors.

Fact remains, there simply isn't enough money to pay for it all. The end result is unavoidable, it's just a matter of what path is taken to get there.