Does anyone have an inkling why Pensions are in trouble?
GOVERNMENT RULES AND REGULATIONS THAT ALLOW THE PENSION CONTRIBUTORS TO NOT FULLY FUND THE PENSIONS…it is the same Ponzi Scheme that that Social Security is based on, but worse.
You are a worker who are told that as part of your compensation, union or non union, that approximately 6 or so percent of your earned compensation is put into the Pension Fund, EXCEPT THE GOVERNMENT allows the the Pension Fund to be under funded as long as it can meet the obligations of the existing pensioners and a certain amount of the up coming retirees. This usually amounts to somewhere in the low 30 percent range, and when the stock market performed well the organizations did not have to augment the fund that much since the market did it for them, so they kept their pension costs low and declared more profits…in other words they were using employee pension money due the employees for the benefit of the organization….not so much lately since the dividends and stock growth on secure investments have not been that terrific, and they have less employees contributing; and the Boomers like me are taking their retirement, lots of us. And this is stressing the system. AND IF YOU THINK YOUR PENSION IS SECURE BECAUSE HE GOVERNMENT INSURED IT…the government only pays out up to the low $30's and most of you pensions are a bit higher than that.
In addition to the Private Pension situation where the government has set up these rules allowing companies to use employees’ money for the organizations’ benefit, government entities at many levels do the same thing, and in some cases do not fund the Pensions at all, but rather do it on a pay as you go, in other words pay the pensioners as if they are on the payroll. This means as one city commissioner in CA put it, I have one set of employees that works,and one set that does not!
Now ask yourself why the government allows this to go on and then says there is a possible crisis out there…ONE MUST ASK …. WHO IS THE FIREMAN AND WHO IS THE ARSONIST?