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    Foreclosures now, Pensions next year

    By Donal on Sun, 10/17/2010 - 7:58am | Politics

    Dylan Ratigan and his guests paint a grim scenario of an attack on middle class America's property, both private and commercial, by banks trying to survive toxic investment vehicles. Doc Cleveland presented that issue in Bailout II and Realism about the Housing Mess generating a lot of discussion.

    We have been looking forward to retiring to our small house in my wife's home town - a small PA city. Our mortgage is smaller than some folks' credit card debt, but our note has been transferred several times - once just last year when the note holder folded. I hadn't really been worried about the validity of our mortgage, but I have wondered if we'll be able to keep up with city taxes. Altoona hired an aggressive company to administer local taxes, and over the last few years, I have been seeing small articles about a looming pension crisis in city governments, such as this one in the Reading Eagle:

    Mayors hear dire warnings about future of state cities

    Pennsylvania cities will begin to topple like dominoes in five to 10 years unless the state Legislature drastically reforms state law controlling employee pensions and other public finances, Allentown Mayor Ed Pawlowski told a municipal association meeting Thursday.

    But Reading Mayor Tom McMahon said Pawlowski is too optimistic: The cities only have two or three years.

    Essentially the mayors are brainstorming ways to avoid bankruptcy, and one of the big items coming due is the costs of defined-benefit pension plans.

    Pawlowski said Allentown's annual payments to the pension fund were $6.5 million when he took office five years ago. Now they are $15 million and 20 percent of the city budget, and by 2012 will be 25 percent.

    Chamber of commerce seek reform of pension, arbitration laws

    State law mandates that municipal employees get defined-benefit plans, in which a certain formula-based payment will be made when they retire. Cities must ensure the pension funds have enough money to make those payments even if investment values drop.

    Most private companies long ago switched to a so-called defined-contribution plan, such as a 401(k). In those, the employer contributes a set amount into each employee's pension account but makes no promise what that pension will be worth when the employee retires.

    Pensions are a touchy subject. Those that have them, expect to collect. Those that have to pay increased taxes point at certain egregious cases of police, fire and even sanitation employees gaming the system to inflate their retirement salary to much more than anyone would have expected. I suspect there will be some renegotiation, but that most of the costs will passed along to city residents.

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    Pensions are a touchy subject. Those that have them, expect to collect. Those that have to pay increased taxes point at certain egregious cases of police, fire and even sanitation employees gaming the system to inflate their retirement salary to much more than anyone would have expected. I suspect there will be some renegotiation, but that most of the costs will passed along to city residents.

    Assuming there are many city residents left besides the pensioners. A lot of the smaller burgs are dwindling as people leave to find employment else where.


    by cmaukonen on Sun, 10/17/2010 - 8:41am

    Pensions have a federal guarantee. If the pension fund goes tango-uniform, the government steps in to prop it up and takes the company to task to shore up their default to their retirees.  Of course, that federal guarantee means the company is paying a fee to a government entity that monitors employee retirement trust funds and those fees are used to pay retirees whose pension funds are defunct.

    When the concept of 401-K's were introduced, they were meant to supplement an employees retirement pension. Thanks to republicans, companies were given the opportunity to switch from employee pension plans under government regulation with a fee to a plan that was free and clear of government regulation and fees. So if you're 401-K retirement plan goes tango-uniform because the market crashes and you loose everything, tough shit.

    By the way, when I was a state employee, part of my salary went into a pension fund. What was really odd was I didn't pay into social security. Something about being an employee of a state, county, city with a pension plan made me exempt. So if a state, county or city retiree's pension plan goes tango-uniform they don't have the luxury of social security to see them thru.


    by Beetlejuice on Sun, 10/17/2010 - 12:55pm

    (Matthew 18:23-34) 23 ,,,,,,,,,, a king, that wanted to settle accounts with his slaves. 24 When he started to settle them, there was brought in a man who owed him ten thousand talents [=60,000,000 de·nar′i·i]. 25 But because he did not have the means to pay [it] back, his master ordered him and his wife and his children and all the things he had to be sold and payment to be made.

    26 Therefore the slave fell down and began to do obeisance to him, saying, ‘Be patient with me and I will pay back everything to you.’ 

    27 Moved to pity at this, the master of that slave let him off and canceled his debt. 

    28 But that slave went out and found one of his fellow slaves that was owing him a hundred de·nar′i·i; and, grabbing him, he began to choke him, saying, ‘Pay back whatever you owe.’ 29 Therefore his fellow slave fell down and began to entreat him, saying,

     ‘Be patient with me and I will pay you back.’ 

    30 However, he was not willing, but went off and had him thrown into prison until he should pay back what was owing. 31 When, therefore, his fellow slaves saw the things that had happened, they became very much grieved, and they went and made clear to their master all the things that had happened. 32 Then his master summoned him and said to him, ‘Wicked slave, I canceled all that debt for you, when you entreated me. 33 Ought you not, in turn, to have had mercy on your fellow slave, as I also had mercy on you?’ 34 With that his master, provoked to wrath, delivered him to the jailers, until he should pay back all that owed. 

    The bankers cried out for help,  “Help us or great suffering will occur, many of our members might be thrown into prison.

    The king (government) felt pity and gave the bankers money so they could avoid calamity. The bankers might lose their homes and their families suffer.

     Now the bankers want to punish those of lesser means, throwing the slave class out of their homes. Caring less about the families of their fellow slaves

     Our government (our king) needs to go after these wicked crooks, bring back the money nd take away the bankers homes, let them suffer what they want the slaves to suffer.

     


    by Resistance on Sun, 10/17/2010 - 1:45pm

    I have read a couple articles on this subject and saw some 'political' discussion of the pension issue on cable.

    Entitlements. Like people think after 30 years they are entitled to something.

    This Arpaio has about three pensions going now as do all the generals who are triple dippers; hell quadruple dippers.There are gamers in the 'system'. That is for sure.

    The pension funds of course were invested in dubious 'ventures'. So who gets stuck holding the debt mess?

    Wall Street should be stuck with all of this debt and a surcharge should be made upon every transaction in which they are involved. Make the gamblers pay.

    Oh the bonus packages and stuff were earned. But the municipal janitor after 30 years of cleaning toilets is receiving entitlements. ha

    That's what I say!!!


    by Richard Day on Sun, 10/17/2010 - 5:17pm

    The pension tension...


    by LisB on Mon, 10/18/2010 - 2:28am

    I have a penchant for a pension


    by Resistance on Mon, 10/18/2010 - 5:57am

    I'm feeling very pensive.


    by cmaukonen on Mon, 10/18/2010 - 9:38am

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