3 ms·

Elected Politician: what so you want? Union: pay raises! Elected Municipal CFO: we can't. No more money. Elected Politician: what about retiring 5 years earl

by jknz 9y ago

Elected Politician: what so you want? Union: pay raises! Elected Municipal CFO: we can't. No more money. Elected Politician: what about retiring 5 years earlier? Unions: we will take that! Elected Politician: retiring earlier costs nothing right now correct? Municipal CFO: yes but... Elected Politician: Fine let's give everyone 5 years earlier retirement. My successor will deal with that when I will be gone.

lotsofpulp 9y ago
More like politician or candidate hires the actuarial consultant which will use the most liberal assumptions they can to make the costs appear as cheap as possible. And then not even fund to those calculations, because who is going to force them to?
- dashundchen 9y ago
  Or in many states, use the surplus from pension funds to operate the government, writing an IOU they know future governments won't be able to pay. Unsurprisingly when the shortfall comes the same politicians who borrowed will be shouting how pensions are unsustainable. In New York, the pension fund is firewalled from the state budget and run fairly independently. After the last recession, the pension fund made several changes in conjunction with the unions: * Ensured the forecasted return estimates were in-line with reality (7%, which it has exceeded in the past decade) * Introduced a new tier so new employees contribute for their whole career, with contribution rates progressively increasing as you earn more * Introduced a limit on the final average salary that determines pension payout * Lengthened the window of final salary calculation and introduced rules preventing large overtime variances counting towards this calculation. Still a decent pension system if you can vest, but with reasonable expectations set. As a result, NYS is one of the best funded pensions in the country and in the upper 90s% of future funding levels.
deleted 9y ago
[deleted]

by jknz 9y ago

lotsofpulp 9y ago

More like politician or candidate hires the actuarial consultant which will use the most liberal assumptions they can to make the costs appear as cheap as possible. And then not even fund to those calculations, because who is going to force them to?

dashundchen 9y ago
Or in many states, use the surplus from pension funds to operate the government, writing an IOU they know future governments won't be able to pay. Unsurprisingly when the shortfall comes the same politicians who borrowed will be shouting how pensions are unsustainable. In New York, the pension fund is firewalled from the state budget and run fairly independently. After the last recession, the pension fund made several changes in conjunction with the unions: * Ensured the forecasted return estimates were in-line with reality (7%, which it has exceeded in the past decade) * Introduced a new tier so new employees contribute for their whole career, with contribution rates progressively increasing as you earn more * Introduced a limit on the final average salary that determines pension payout * Lengthened the window of final salary calculation and introduced rules preventing large overtime variances counting towards this calculation. Still a decent pension system if you can vest, but with reasonable expectations set. As a result, NYS is one of the best funded pensions in the country and in the upper 90s% of future funding levels.

deleted 9y ago

[deleted]