Monday, January 3, 2011

Caveat Lectores on Underfunded Pensions #2

The Lector received this from the Cypen & Cypen Newsletter and posted a Rant in July 2010. Things have gotten worse not better since then. Here it is again.

Unfunded public pension liabilities will not result in defaults by municipal bond issuers because the problem is not severe enough to cause financial distress, a report by Herbert J. Sims & Co. says. Reviewed by, the report finds that state and city retiree funds are not insolvent and forecasts of widespread defaults and municipal bankruptcies are overblown. A historic review of pension history shows that underfunding has not led to budgetary insolvency and default.

Separately, Standard & Poor's said in its own report that the funded pension level for state plans fell to 80 percent in 2008 from 83 percent in 2007 and 100 percent in 2000. The funded ratio is the amount of assets available to pay expected future benefits. S&P said the decline in public pension assets is contributing to significant budget challenges for U.S. states

Here is what you need to know and share it with others:

• Yes, there are some pension funds that are in trouble. Some not all
• Yes, there are some funds that are giving generous benefits. Success is a virtue to many.
• Yes, the benefits cost some money in the form of taxes to citizens. Government costs money.
• Yes, the problem was not caused by the employees. Employees ask for things, they do not demand anything.
• Yes, the stock market is down. It will rebound and always has.
• Yes, the employers selectively underfunded the pension funds when they could get away with it. Now, the politicians and right wingers do not want to pay up. They blame the employees.
• Yes, the taxpayers will have to make up for the bad judgment of the professional managers and politicians. We call that representative democracy.
• Yes, this is seen by right wingers and big corporate interests as an opportunity bring public employees in line with the private sector employees whom they raped in years past.
• Yes, employee benefits reduce profits. All expenses reduce profits. Government is NOT a profit making enterprise. Duh!
• No, big business can never make enough profits to make sharing a virtue to them.
• No, unions did not cause the problem.

If there is anything about this Rant you do not understand, feel free to respond. I will take what you say under advisement and place it where any right wing, tea bagger bullshit should go.

and Oh yes, have a nice Day?


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