Thread: Public Pension Cuts: military & civilian

Originally Posted by Storekeeper

Originally Posted by terry57

We read stories all the time where some punter has lost every fookin thing he or she has worked for their entire lives.

Pension reform: Former San Jose mayor highlight's lesson of cuts to retirees in tiny Loyalton

"But Reed avoided any criticism of Loyalton’s retirees, whose pensions hardly seem generous and whose plight is just sad. The Times featured a 71-year-old former bookkeeper who expects to see her $48,000 annual pension cut to $19,000".

Open link for entire article.

This is a HUGE cut.

We'll be hearing more stories like this, and it may not be just from "tiny" towns.

Many states were allowed to "cook their accounting books" by Congress in the late 1970s.

Certain states, and certain occupations in particular states (e.g. teachers, etc).

Originally Posted by terry57

^

We are seeing this now with older Australians who reside outside Thailand.

The Government has gone in with a huge fok off Knife and slashed the Pension.

The writing was on the wall a long time ago though.

Aussies residing outside Thailand or outstide Oz?

Is this related to what Australians told me about 7-8 years ago: The Australian govt automaitcally without warning passed a law that stated (to paraphrase):

To collect the Aussie pension Australians *cannot* be outside of Australia for more than 90 days per year.

My Australian friend heard about it while driving his car listening to the radio.

You pay into a system for 40+ years and with the snap of a finger then deal is changed.

Originally Posted by Cold Pizza

You pay into a system for 40+ years and with the snap of a finger then deal is changed.

If you rely on your government, yes. Governments everywhere are short of money and looking to cut wherever they can.

Pensions have to be funded in accordance with a sound actuarial formula, if they are to be secured. Governments at all levels have not done this and simply relied on future tax revenues. Bad plan with resulting bad results.

Originally Posted by koman

Originally Posted by Cold Pizza

You pay into a system for 40+ years and with the snap of a finger then deal is changed.

If you rely on your government, yes. Governments everywhere are short of money and looking to cut wherever they can.

Yes, absolutely.

Pensions have to be funded in accordance with a sound actuarial formula, if they are to be secured. Governments at all levels have not done this and simply relied on future tax revenues. Bad plan with resulting bad results.

Indeed.

Originally Posted by Cold Pizza

Originally Posted by terry57

^

We are seeing this now with older Australians who reside outside Thailand.

The Government has gone in with a huge fok off Knife and slashed the Pension.

The writing was on the wall a long time ago though.

Aussies residing outside Thailand or outstide Oz?

Is this related to what Australians told me about 7-8 years ago: The Australian govt automaitcally without warning passed a law that stated (to paraphrase):

To collect the Aussie pension Australians *cannot* be outside of Australia for more than 90 days per year.

My Australian friend heard about it while driving his car listening to the radio.

You pay into a system for 40+ years and with the snap of a finger then deal is changed.

An Australian friend of mine here in Thailand went back to Australia 3 years ago and got that very same problem fixed, he is now full time back in Thailand.

My interpretation of this ruling is: yes, "pension spiking" and pension fraud has existed and does exit in California.

It should be dealt with.

But this ruling also legally sets a precedent that pension can legally be reduced/cut as long as you "receive a pension that is 'reasonable.'

IMO, this is paving the way......



In Massive Blow To California Unions, A Second Court Rules That Pension Benefits Can Be Reduced


by Tyler Durden
Jan 4, 2017

Back in September, we noted that, in a surprisingly logical decision particularly for a state like California which is typically devoid of all reason, a court upheld the rights of Marin County (and it's taxpayers) to reduce final year salary levels utilized to calculate pension payments. The ruling was meant to protect taxpayers against "salary spiking," a practice whereby union employees artificially drive up their final year salary, by taking cash vacation payouts or 1x bonus payments for example, in an effort to game the annual pension payment they'll then receive in perpetuity.

Now, according to Pension & Investments, a second California court in San Francisco has made a similar ruling, finding that while a public employee does have a "vested right" to a pension it is only to a "reasonable pension."

A second California appeals court panel has said that vested pension rights can be reduced or eliminated in California as long as employees still receive a pension that is “substantial” and “reasonable,” court filings show.

The Dec. 30 decision by a three-member panel in San Francisco affirmed a state pension reform law that went into effect in 2013 and eliminated the right of participants of the $302.4 billion California Public Employees' Retirement System, Sacramento, to enhance their pension by buying retirement credits. A lower court in Alameda County in 2015 had ruled that the pension enhancement benefits could be eliminated.

The enhanced benefit, known as an airtime service credit, allowed CalPERS participants to increase their retirement benefit by up to five years by making additional contributions from their salary.

Meanwhile, the San Francisco court cited the Marin Country decision from August which found that employees have a right to a pension but "not an immutable entitlement to the most optimal formula of calculating the pension." The August decision in Marin County was pivotal because, for the first time, it brought into question a 5-decade California rule which held that pension benefits could not be cut.

The panel cited another state appeals court's decision in August, which said the $2.1 billion Marin County Employees' Retirement Association, San Rafael, did not have to count pay given to employees for being on an on-call status toward retirement benefits.

That decision also cited the 2013 pension reform law, which applies not only to CalPERS but to most other public pension systems in California.

The law put in place anti-spiking provisions that prevent pension benefit increases from unused vacation and leave, bonuses, terminal pay, among other things.

These “anti-spiking” provisions apply to current workers.

“While a public employee does have a 'vested right' to a pension, that right is only to a 'reasonable' pension — not an immutable entitlement to the most optimal formula of calculating the pension,” the appeals panel wrote in August.

That decision put into question the so-called California rule, which held for five decades that pension benefits could not be cut.

The California Supreme Court has agreed to hear an appeal on the Marin County case, although no schedule has yet been set for oral arguments.

In Massive Blow To California Unions, A Second Court Rules That Pension Benefits Can Be Reduced | Zero Hedge

Play it Sam. No surprise here and expect many more changes to pensions such as raising the age of eligibility and the amount you'll get.

Look at the bold at the bottom: they planned on an annual return of 8.5% but instead got a LOSS of 1.5% over the last 5 years. That's a spread of -10%.

How many other pension plans are in the same boat? A LOT.



Dallas Police and Fire Pension Backs Cutbacks to Avoid Collapse
by Martin Z Braun
February 22, 2017

State lawmaker plan would raise retirement age, cut raises
Dallas would also boost contributions to shore up pension
The Dallas Police and Fire Pension is getting behind a Texas lawmaker’s plan to save the retirement system from financial collapse.

The fund’s board voted 9-0 on Monday to back a proposal by Dan Flynn, chair of the pensions committee in the state’s House of Representatives, that would raise the retirement age to 58 from 55, eliminate cost-of-living adjustments and lower a multiplier used to determine the size of officers’ and firefighters’ benefit checks, according to a summary on the pension’s website.

The plan would also increase Dallas’s annual contribution to 34.5 percent of payroll plus $11 million per year. The city contributed 27 percent in 2015, according to audited financial statements. Employee contributions would climb to 13.5 percent of their pay from 8.5 percent.


The $7 billion shortfall in the police and fire pension triggered downgrades to Dallas’s credit rating from Moody’s Investors Service and S&P Global Ratings. The system was battered by losses on exotic investments including Hawaiian villas, Uruguayan timber and undeveloped land in Arizona. The pension, which counted on annual investment returns of 8.5 percent to cover promised benefits, had an average 1.5 percent loss over the past five years, according to S&P.

https://www.bloomberg.com/news/artic...avoid-collapse