Are Pensions a Promise?

www.illinoispolicy.org...
CHICAGO MAYOR RAHM EMANUEL ENDORSES PENSION AMENDMENT TO ILLINOIS CONSTITUTION

I'm picking on Illinois again, but something's got to give.

I feel for the people that went into a job and stayed counting on a nice retirement. Maybe some of them would have chosen a different
career. Who knows. What I do know is that they have been sold a lie. There is no way the rich pensions can continue on the path they were promised.

It is time to break that promise or else, everyone will suffer. Maybe even people outside of the state.
Illinois is literally at it's breaking point, I think we are going to see the straw that breaks the camel's back pretty soon.

Just look at this! 85% 85%!!!!!!!

According to Peoria City Manager Patrick Urich, 85 percent of the city’s property tax revenue currently goes to pensions, rather than services.

www.illinoispolicy.org...

a reply to: JAGStorm

Yeah, and they can't write off a lot of that tax this time, foisting it off on the Fed. The deduction is capped now. Illinois is going to feel the pain of those super-high property taxes full force.

I get the idea of a pension, but public employees have been made promises that could never be kept under the programs they were given.

originally posted by: ketsuko
a reply to: JAGStorm

Yeah, and they can't write off a lot of that tax this time, foisting it off on the Fed. The deduction is capped now. Illinois is going to feel the pain of those super-high property taxes full force.

I get the idea of a pension, but public employees have been made promises that could never be kept under the programs they were given.

I never realized how bad it was until one time I went to a holiday party at a retired cops house. It was seriously a mansion on huge acreage. At first we thought he must be a dirty cop, but no, it is actually all their very lucrative pension.

“The average Chicago police pension (2009-10) is $62,000 at age 58 after 29 years.”

Keep in mind, 62K is the average, some are making much more! and there were cases where they were double dipping.
so so so much corruption..


www.illinoispolicy.org...
taxpayersunitedofamerica.org...

a reply to: JAGStorm

Thing is that it's not just Illinois. They do this in the Federal workforce too. We're on the hook for it nationally, and when you factor in that the average federal employee makes at least 1/3 again more than his or her private sector counterpart ... and that private sector companies have found pensions to be largely unsustainable (my husband is fortunate; he got in at the last tier of employees to be offered one at his place of work), then you see the size of the problem.

The pensions are an inside job. They weren't promises made by taxpayers and citizens to government workers, they were promises made by politicians to other politicians or themselves. They are not legal, legitimate or binding.

a reply to: JAGStorm

I get a pension from a labor union that I belonged to back in the eighties. 79 - 91 actually.
I am pretty sure that it is funded by investment of funds and employer contributions on behalf of current un retired members.
The problem as I see it is that a lot of baby boomers are at or nearing retirement age and while not all will retire the number of retired members will eventually outnumber the contributing members.
Same with social security. I retired four years ago already but I will only just be eligible to collect social security next year.
I've been getting the pension for a couple of years now.

Disclaimer: This is my opinion, and I'm not an attorney, nor have I stayed in a Holliday Inn:

Pensions agreements should be considered a contract. Why? They are conditions that you agree to, along with the party making the promises when you agree to do X amount of work for Y amount of time. The entity making the promise does so in order to forge a mutually beneficial relationship; the company benefits by continuity of employment of the employee, and the employee is rewarded for their loyalty by payment, part of which are benefits.

I can't recall ever reading "the foregoing may be yanked out from underneath you without penalty, should the company, county, city, state, or country screw up the finances, misappropriate monies, or otherwise mangle this agreement."

a reply to: argentus

Earnings statements are provided to members quarterly. They are accompanied by very legaleeeez type documents pretty much saying that there is no guarantee that the pension will be funded.

a reply to: Sillyolme

Just curious -- does that statement supercede a written and signed agreement? Or is it more like the sign on the wall of a cleaners that claims "not responsible for ........"?

I would be interested in the opinion of a trained legal mind, wouldn't you?

a reply to: argentus

The problem I have with this is that as a taxpayer, no one asked me if I wanted to be party to this contract, but those who negotiate government workers' contracts make pension promises and mismanage funds so those promises are unrealistic which leaves me on the hook to pay for these things.

Where is my representative in all this? Why do I have to be held liable when my name never appeared on any dotted line?

yes not only are pensions a promise, they are a contract. it has always been considered part of a workers pay package, ie money that has been earned by the employee. therefore if a person has worked and that was part of the pay agreement between a workplace and employee, there should be absolutely no way they can change it, since the person has already done the work contracted to receive it. if you have a contract to say build someone something, they can not later say that even though they were satisfied for the work, that they will only pay you a part of the contracted price for the services already rendered. in fact we need to change laws to insure that ALL moneys for pensions are set aside at the time of employment, when the work has been done. money that can not be touched at all by an employer, being legally owned by the employees.


the real problem is not that government has promised too much (but that seems certainly to be a problem), but that the money to pay said pensions was never put aside to pay them. that is the fault of the governments, and ultimately on the voters who kept voting for the people making these decisions. and who failed to properly insure the money was there to pay the pensions. they made the contracts, the workers did the required work, it is up to the employer to pay the agreed upon wages. now if they want to make changes to pensions, they can do so through things like contract negotiations for people already working there for work that they will do in the future. and of course they can easily make changes to new hires. but one thing you would have to keep in mind is that since pensions are in fact a part of wages, then if you reduce the future pensions, you are actually lowering those wages, which would likely mean that they would need to pay the difference as part of normal pay. i certainly can not see people already working for someone taking a pay cut. and i certainly can not see any union accepting a new contract with what would be massive pay cuts.

something interesting that a company i worked for started doing was to make the employees themselves make the decisions about who and where their pension moneys were invested. in other words the money for those pensions was already paid out, as the people were earning it. hich is the way it should be done.

originally posted by: ketsuko
a reply to: argentus

The problem I have with this is that as a taxpayer, no one asked me if I wanted to be party to this contract, but those who negotiate government workers' contracts make pension promises and mismanage funds so those promises are unrealistic which leaves me on the hook to pay for these things.

That is where it is going to get funny. It will no longer be a question of feeling if it is right or wrong, or if you were represented or not. It will just be that people can't actually pay it. That is exactly what is happening.

Here is how the scam worked in Illinois. People that worked in government jobs knew the lucrative system. Then they would hire their friends, their friends kids in these jobs. (I'm not saying any of these jobs are easy btw). I'm not saying it always happened like that, but more common than not. Think of Illinois government like a giant mob family.

Some of these people get in these jobs at 18 and retire right at 50 years old. Now, Illinois is way way too expensive, and they know that. They take that retirement money and head to Florida, or other no/low tax state. So it hurts twice as bad. Everyone is left paying for these pensioners, and they aren't even there to put money back into the economy. Then the people that are left are so strapped from taxes, they have no money to put in the local economy. The taxes get raised, fees get added, and on an on. And that is what you have today. It is at a cracking point now. There is no money left!

The reason it has been happening so long is simple, there is no way the people in line get those pensions want to be the ones that don't get it, and they are the ones that control it. Truly the fox guarding the henhouse!

a reply to: generik

No, it's not even necessarily that.

There was money put aside, but most pensions are managed in a fund. The fund was always managed on a percentage return basis. So the fund managers would say that "Hey! Your pension realized an 8% rate of return this year."

The reality is that the fund never actually realized those rates of return. The numbers given to workers: Your fund holds X, so your pension payments will be Y, are based off of years of projection that are never realized. So the funds are much shorter than they should be or the workers in question were told they were.

So in order for worker to actually receive Y payment every year like he's told he will, there is a massive shortfall.

Promise or not is irrelevant.
You cant pay money you dont have.
You cant borrow to pay with no reasonable way to repay a loan.

originally posted by: Bluntone22
Promise or not is irrelevant.
You cant pay money you dont have.
You cant borrow to pay with no reasonable way to repay a loan.

You cant pay money you dont have - Illinois thinks you can! hahahahahahahahhahahahaha

I don't know if it will all happen next year 2019 or 2020 but it's coming and it's coming soon!

a reply to: argentus

I was gonna post the same, does nott matter who the company is, public or private, they offer you a contract, maybe they could try and buy you out, make a deal, but the employee should not be punished for mismanagment above them, hell thats back to 1970's, dont bother coming in next week mentality.

The same happened in the UK with a lot of public sector workers and the contract previously agreed was honored, with a new system in place for new employees with less generous pensions/benefits, its just got to be sucked up by the employer not the other way around.

We bailed the banks out I am more than happy to give the same to actual real people, hopefully lessons will be learnt by those involved, after all it is public money but in my opinion it is not something these people do not deserve, they did the work ergo they get paid.

a reply to: UpIsNowDown

And if Illinois can't pay? Does that mean I have to? I have never lived in Illinois and I never made that promise and neither did any government I ever voted for.

My point is that the government of Illinois made bad pension deals. If the government of Illinois was a private company and it went out of business, all those employees would be SOL - pension agreement or no. None of you would be carrying on about how this was a contract the company made with them.

So why is government different?

a reply to: JAGStorm

The article was a good read. I can't believe they have 40 billion in pension debt. They are sinking in quicksand. It also sounds like they can't keep taxing their way out of this.

And if Illinois can't pay? Does that mean I have to? I have never lived in Illinois and I never made that promise and neither did any government I ever voted for.

What you just said a thousand times over!!!!!!!!!!!

a reply to: Tarzan the apeman.

Look at the property taxes, tell me how long can this go on!

Here is a random zillow link I picked
This house is pretty average for the area.
4 bed 3 bath, on Sale for 250K

That mortgage would be around $975 a month,

BUT...................Look at the property taxes.
$10,145!!!!!!!!!!!!!!!!

This is just one glimpse, but imagine this happening all over Illinois, to homeowners, to business owners, EVEN to tourist that visit. You should check out the taxes on a hotel stay there!
Yes those taxes are just shy of the mortgage cost, except they never go away!
www.zillow.com... _rect/12_zm/