Yes I knew that. They should just like the rest of us.

So because you don't like your pension plan, we should stick it to teachers and state workers. Yep, that's the answer.

I am an educator. I am a Republican and a fiscal conservative. I have money taken out of my check every 2 weeks that I will never see again. Stolen from me and lied about to cover it up. I do not have a choice to pay into SS. I have my own deferred compensation set up. I say again a huge chunk of my check is taken out for retirement and stolen from me and i will never see it again. I'm angry as hell about it.

 

You should be angry. You were lied to one.

 

One thing people don't realize about defined benefit plans is they are a legal form of discrimination.

 

What I mean is Defined Benefit plans favor older and more tenured employees. You don't truely start accumulating any real benefit until much later in your career. Early on in your career all the funding is going toward the older and more tenured employees.

 

If I'm a younger worker and I'm having money deducted into a defined benefit or target pay pension I should just assume I'm not going to get most my money back.

 

The example I've given that many of the older posters may be familiar with. You work for a company for 5, 10 or maybe 15 years . You move on to mother employer. When you go to roll over your lump sum the amount seems extremely low for the amount of year you put in. It's because the funding of your benefit largely takes place at the end of your career.

Didn't say it was. However, if your company stole the money out of your 401K is it your fault your 401K is broken?

 

A 401k is different from a defined benefit plan. A DB plan is discriminatory and a DC or 401k plan is non discriminatory . The funding rules on DB are more flexible and allows for undrrfunding. It's also a pooled invest where you don't have ownership.

 

A 401k has discriminatory testing, strict funding rules. The account is also owned by the employee and not the employer. So the employer has no access to raid it.

A 401k is different from a defined benefit plan. A DB plan is discriminatory and a DC or 401k plan is non discriminatory . The funding rules on DB are more flexible and allows for undrrfunding. It's also a pooled invest where you don't have ownership.

 

A 401k has discriminatory testing, strict funding rules. The account is also owned by the employee and not the employer. So the employer has no access to raid it.

There are a few problem areas with your analysis. You overlook the fact that once one becomes vested in a defined-benefit plan, then a monthly annuity is guaranteed even if the worker moves to another company. And vesting can occur as soon as three years on the job. Also, 401(k) plans are dicier because the worker assumes the risk of possibly having to withdraw money during market downturns. In a defined benefit plan, the employer assumes the risk.

Interesting discussion.

 

Conway lost big because he was a bad candidate, bad campaigner and ran a bad campaign. It was not because of negative campaigning. Think people. He went totally negative because he knew he was in trouble. It was desperation time by a candidate who knew he was going to lose.

I am an educator. I am a Republican and a fiscal conservative. I have money taken out of my check every 2 weeks that I will never see again. Stolen from me and lied about to cover it up. I do not have a choice to pay into SS. I have my own deferred compensation set up. I say again a huge chunk of my check is taken out for retirement and stolen from me and i will never see it again. I'm angry as hell about it.

Why do you think that you will never see the money again? That's nonsense. Call the KSTRA office in Frankfort and have them run an individual defined-benefit pension analysis for you.

 

Before we all overdose on histrionics, let's not forget that there are federal pension safeguards that have to be followed.

There are a few problem areas with your analysis. You overlook the fact that once one becomes vested in a defined-benefit plan, then a monthly annuity is guaranteed even if the worker moves to another company. And vesting can occur as soon as three years on the job. Also, 401(k) plans are dicier because the worker assumes the risk of possibly having to withdraw money during market downturns. In a defined benefit plan, the employer assumes the risk.

 

For the most part most pensions vesting schedule is 5 years. It can be 3 but is rare. 5 is the standard.

 

I didn't overlook anything. If you want me to go further I can. Companies assume risk but if bankruptcy occurs private sector employees are protected by the PBGC for at least some of their pension. But there are many horror stories like Delphi a General Motors affiliate.

 

Market risk is assumed by the employee but they lose bankruptcy risk. I personally have more control over my market risk by my long term asset allocation . I have no control over bankruptcy risk.

 

On top of that the PBGC does not protect government pensions . So if a state can't pay , you just don't get paid.

LB .... has any state or government ever failed to pay the promised pension amount?

LB .... has any state or government ever failed to pay the promised pension amount?

 

Cities have , I don't believe any states have to date. But there are at least a handful close to default.

Cities have , I don't believe any states have to date. But there are at least a handful close to default.

Having a state pension system significantly underfunded and being "close to default" are two different beasts. Kentucky's underfunding is worse than most states, but I've yet to hear the "D" word. The state sales tax could be raised by a penny for starters, correct? Ain't gonna happen, but that's one possible solution. It's not as if there are no solutions.

Having a state pension system significantly underfunded and being "close to default" are two different beasts. Kentucky's underfunding is worse than most states, but I've yet to hear the "D" word. The state sales tax could be raised by a penny for starters, correct? Ain't gonna happen, but that's one possible solution. It's not as if there are no solutions.

 

I've not come across "default" either, but the state's credit rating was lowered because of this mess back in September (I think September).

 

Concerning taxes, it's hard to envision a way this gets fixed without taxes being raised in some form or fashion. The people who have the guts to raise them will, unfortunately, get the blame.

Having a state pension system significantly underfunded and being "close to default" are two different beasts. Kentucky's underfunding is worse than most states, but I've yet to hear the "D" word. The state sales tax could be raised by a penny for starters, correct? Ain't gonna happen, but that's one possible solution. It's not as if there are no solutions.

 

Again have you looked at the numbers. We aren't going to tax our way out of this problem.

 

Taxes don't fix early retirement dates. Taxes don't fix longer life expectancy. Taxes don't fix high actuary and record keeping costs.

 

I love pensions. I wish I had a pension. It obviously has many positives. But we have to understand economic reality.

 

There are people who are living longer on their pension than they actually worked for their private sector/ government job. That is just unsustainable.

To build on life expectancy change. In 1956 when KERS was created average life expectancy for a male was 66.7 now it hovers in the 80s from 80-85 according to who's data you use .

 

Think about the added strain and payments with very minimal changed to when people can retire.

There is another thread running on this retirement funding issue. I suggest continuing this discussion there and let this thread stay focused on the Bevin win.

Again have you looked at the numbers. We aren't going to tax our way out of this problem.

 

Taxes don't fix early retirement dates. Taxes don't fix longer life expectancy. Taxes don't fix high actuary and record keeping costs.

 

I love pensions. I wish I had a pension. It obviously has many positives. But we have to understand economic reality.

 

There are people who are living longer on their pension than they actually worked for their private sector/ government job. That is just unsustainable.

The state certainly could enact a one-penny sales tax increase for X number of years to increase the pension asset level for state workers by, say, 20 percentage points. If cities can do such to build NFL stadiums (used just 10 days a year), then states can do same for their workers' retirement system.

 

Re: assigning pension shortfall blame to people living longer and retiring earlier: This isn't a recent phenomenon. I've also dealt with actuaries, and no doubt Kentucky contracts with an actuarial firm to stay current. The problem is that the commonwealth never properly maintained pension funding levels because when a new road was built in Pike County, it was easier to forgo a pension contribution rather increase the gas tax.