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Pension shortfalls are a problem - but consider that many of the pensions were designed in an era where the cities and towns were built very differently and whe

Pension shortfalls are a problem - but consider that many of the pensions were designed in an era where the cities and towns were built very differently and where wealth was accumulating at a steady pace, so cities believed these obligations were prudent and would be affordable to future generations. The pension story is more complicated than just development patterns, but cities gradually losing more and more wealth to bad infrastructure patterns over multiple generations is a significant contributor to why pensions are out of funding (along with everything else).

mike50 7y ago
Lifespans have increased. Pensions were designed with the assumption that people would die more often and earlier.
lotsofpulp 7y ago
>The pension story is more complicated The pension story is that people think they can predict economic conditions decades into the future. Which they can't. And they think they can predict human lifespan statistics decades into the future. Which the can't. More importantly, the pension story is that there's a built in conflict of interest. The politician and union bosses on the board of the pension plan get to choose the actuary that provides them with the rosiest numbers. The politician needs the union member's votes because they all vote, and the union members are incentivized to maximize benefits and show the lowest costs. This is all too complicated for normal to understand, and they don't vote for anything other than lower taxes anyway. No one gets elected promising to save future taxpayers money by properly funding pensions by raising taxes now.
- masonic 7y ago
  people think they can predict economic conditions decades into the future In most cases, these deals were known to be unsustainable the day they were written. Math just isn't that hard.
  - lotsofpulp 7y ago
    Yes, I also would not give the decision makers the benefit of the doubt.

mike50 7y ago

Lifespans have increased. Pensions were designed with the assumption that people would die more often and earlier.

lotsofpulp 7y ago

>The pension story is more complicated The pension story is that people think they can predict economic conditions decades into the future. Which they can't. And they think they can predict human lifespan statistics decades into the future. Which the can't. More importantly, the pension story is that there's a built in conflict of interest. The politician and union bosses on the board of the pension plan get to choose the actuary that provides them with the rosiest numbers. The politician needs the union member's votes because they all vote, and the union members are incentivized to maximize benefits and show the lowest costs. This is all too complicated for normal to understand, and they don't vote for anything other than lower taxes anyway. No one gets elected promising to save future taxpayers money by properly funding pensions by raising taxes now.

masonic 7y ago
people think they can predict economic conditions decades into the future In most cases, these deals were known to be unsustainable the day they were written. Math just isn't that hard.
- lotsofpulp 7y ago
  Yes, I also would not give the decision makers the benefit of the doubt.