Broken
Promises: Pensions All Over America Are Being Savagely Cut Or
Are Vanishing Completely
http://theeconomiccollapseblog.com
http://albertpeia.com/uspensionscutorvanishing.htm
‘How would you feel if you worked for a state
or local government for 20 or 30 years only to have your pension slashed
dramatically or taken away entirely? Well, this exact scenario is playing
out from coast to coast and in the years ahead
millions of elderly Americans are going to be affected by broken promises and
vanishing pensions. In the old days, things were much different.
You would get hired by a big company or a government institution and you knew
that the retirement benefits that they were promising you would be there when
you retired in a few decades. Unfortunately, we have now arrived at a
time when government institutions and big companies have promised far more than
they are able to deliver, and "pension reform" has become one of the
hot button issues all over the nation. Many Americans that have been
basing their financial futures on their pensions are waking up one day and
finding that their pensions are either gone or have been cut back dramatically.
According to Northwestern University Professor John Rauh,
the latest estimate of the total amount of unfunded pension and healthcare
obligations for state and local governments across the
There simply is not enough money out there to keep all of the pension
commitments that have been made. Something has got to give. In the
end, millions of elderly Americans will likely be plunged into poverty as
pensions disappear.
Some local governments around the nation are already declaring bankruptcy
and are either eliminating pensions or are cutting them very deeply. Just
check out what just happened in Central Falls, Rhode
Island....
For years, city officials
promised robust union contracts and pensions without raising revenue to pay for
them. Last August, the math caught up with them. Central Falls
was broke, its pension fund short $46 million. It declared bankruptcy.
"My daughters grew up
here, went to school here. It's all gone," said Mike Geoffroy,
a retired firefighter.
He said he could not make
the payments on his house after his pension was cut by $1,100 a month.
When will the math catch up with the city where you are living?
For years and years most of our state and local politicians have been
ignoring this problem. But eventually a day comes when you simply cannot
ignore it any longer.
Check out what Pensacola Mayor Ashton Hayward said about the situation in his
city recently....
"When our annual
pension liability is more than our yearly property tax revenues, we have to do
something"
Keep in mind that taxpayers don't get any new services for money spent on
pensions. It is money that goes straight into the pockets of retired
workers. State and local governments are desperately trying to pay
retired workers what they are owed and fund ongoing government functions at the
same time, but many have reached the breaking point.
All over the country, state and local governments are going broke. The
following is from a recent article by Duff McDonald....
Things are so bad in Stockton, California
that they are actually skipping debt payments....
The city of 290,000 that
rode the wave of the housing boom in the late 1990s and early 2000s now finds
itself littered with foreclosed homes, saddled with pension, health care and
other obligations it can't afford, and unable to pay its bills.
The City Council voted last
month to suspend $2 million in bond payments and begin negotiations with bond
holders, creditors and unions.
And did you notice what is being blamed for the financial problems in
Pension and healthcare benefits.
Sadly, we are seeing pension nightmares erupt all over the nation right now.
For example, check out what is happening to the Public School Employees'
Retirement System and State Employees' Retirement System in Pennsylvania....
PSERS had an accrued
unfunded liability of nearly $26.5 billion, the amount
of money the fund is short to cover existing retirement benefits. That hole is
expected to grow to $43 billion by 2019. SERS is $12.5 billion in the red, and
that shortfall is expected to climb to nearly $18 billion by 2018. Unless the
stock market makes giant sustained gains, taxpayers will have to refill those
funds.
That doesn't sound good at all.
In
How in the world can a single county be facing a 10 billion dollar hole?
This is madness.
The state of
In fact, there are going to be a whole lot of broken promises all over the
country.
Pension consultant Girard Miller told
That comes to about $22,000 for every single working adult in the state of
So where is all of that money going to come from?
But at least most state and local government employees are still covered by
pension plans, even if they are failing.
In the private sector, pension plans are vanishing at lightning speed.
According to the
That isn't just a trend.
That is a tidal wave.
And many of the private pension plans that still exist are massively
underfunded. For example, Verizon's pension plan is underfunded by 3.4 billion dollars.
So what should Americans do in light of all this?
Well, the number one thing to realize is that the pension plan you have been
counting on could disappear at any time.
We live in an economic environment that is extremely unstable, and about the only thing you
can count on in this environment is rapid and dramatic change.
Do not plan your financial future around a pension plan. If you do,
you are likely to be bitterly disappointed.
Americans that plan to retire in the coming years should do their best to
try to fund their own retirements.
Unfortunately, most Americans are not putting away much of anything for
retirement. As I have written about previously, one study found that American workers are $6.6 trillion short of what they need
to retire comfortably.
Ouch.
Over the next 20 years approximately 10,000 Baby Boomers
will be retiring every single day.
A lot of them are going to be blindsided by empty pension funds and broken
promises.
We are facing a retirement crisis of unprecedented magnitude, and there is
not much hope in sight.
And if there is a maor stock market crash, things
are going to be much, much worse.
Most pension funds and retirement plans are heavily invested in the stock
market. If we were to see a major financial crisis like we saw back in
2008 it would be absolutely devastating. Millions of Americans could see
their retirement plans wiped out in short order.
Once again, please do not place your faith in the system.
If you do, you are likely to end up holding a bag of broken promises.
A gigantic tsunami of unfunded pension obligations is coming. A lot of
state and local governments are going to go broke. A lot of promises are
going to be broken.
If you hope to retire any time soon, you better plan on being able to take
care of yourself.’
