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The author just kind of brushes by this, but my main problem with pensions in general is their tendency to be underfunded. It's just one more way for current v

The author just kind of brushes by this, but my main problem with pensions in general is their tendency to be underfunded. It's just one more way for current voters to externalize the costs of their benefits onto future generations. 401(k)s by design can't extract funding as future liabilities. Are there proposals for ways to do this for pensions? I know there are pushes to "fully-fund" them, but the temptation to use overly optimistic projections seems like it will never really go away.

hackermailman 9y ago
Indeed nothing was written about city/state pensions that do not make projected returns year after year and require significant funding which most cities can't afford.
- boomboomsubban 9y ago
  It's in the second paragraph, and the collective shareholders voice isn't really part of the underfunding issue.
dalbasal 9y ago
I think that to some extent it's a case of 'who takes the risk' or 'what happens if things don't work out'. Anyway, consider that this is all quite new to us. A highly financialized pension setup is not something multiple generations have done and the pension demographics have never really been what they are now, or will be soon. I'm not sure the macroeconomics of that many pensioners, living for 30-40 years on savings... it goes beyond just financial math, or even political-financial math.
boomboomsubban 9y ago
The article isn't promoting the absolute return of pensions. They're arguing that whatever system ends up replacing it should have some collective shareholders voice for dealing with the financial industry.
Spooky23 9y ago
Some states, like New York mandate public pension funding and do pretty well. There are issues with pension spiking for public safety positions, and some municipalities have had to bond to make payments, but as a whole the system works. The formula is simple, don’t allow skipping out on liabilities and have an independent entity administer the plan. In New York, the state comptroller controls the pension funds as well as 529 plans. This avoids the issues in many states and the private sector where executives raid the funds. The other issue with the anti-pension crowd is that people need to live. So no matter what you do, the public ends up paying for things like subsidized housing, healthcare and other entitlements that impoverished elderly people end up needing without adequate income. I think will start to appreciate this phenomenon when the wave of 50-somethings purged by the Fortune 1000 start qualifing for Medicaid.
emodendroket 9y ago
Deliberately underfunding things to turn around and call them unsustainable is a classic political move to kill popular programs.

hackermailman 9y ago

Indeed nothing was written about city/state pensions that do not make projected returns year after year and require significant funding which most cities can't afford.

boomboomsubban 9y ago
It's in the second paragraph, and the collective shareholders voice isn't really part of the underfunding issue.

dalbasal 9y ago

I think that to some extent it's a case of 'who takes the risk' or 'what happens if things don't work out'. Anyway, consider that this is all quite new to us. A highly financialized pension setup is not something multiple generations have done and the pension demographics have never really been what they are now, or will be soon. I'm not sure the macroeconomics of that many pensioners, living for 30-40 years on savings... it goes beyond just financial math, or even political-financial math.

boomboomsubban 9y ago

The article isn't promoting the absolute return of pensions. They're arguing that whatever system ends up replacing it should have some collective shareholders voice for dealing with the financial industry.

Spooky23 9y ago

Some states, like New York mandate public pension funding and do pretty well. There are issues with pension spiking for public safety positions, and some municipalities have had to bond to make payments, but as a whole the system works. The formula is simple, don’t allow skipping out on liabilities and have an independent entity administer the plan. In New York, the state comptroller controls the pension funds as well as 529 plans. This avoids the issues in many states and the private sector where executives raid the funds. The other issue with the anti-pension crowd is that people need to live. So no matter what you do, the public ends up paying for things like subsidized housing, healthcare and other entitlements that impoverished elderly people end up needing without adequate income. I think will start to appreciate this phenomenon when the wave of 50-somethings purged by the Fortune 1000 start qualifing for Medicaid.

emodendroket 9y ago

Deliberately underfunding things to turn around and call them unsustainable is a classic political move to kill popular programs.