Unfunded Benefits Dig States’ $3 Trillion Hole: Bloomberg.com

This story is not really news, but it attracts so little attention. The underfunded state and local pension and retiree health care obligations wobbles the mind.

Who is going to pay for this?  How?

Minnesota is in better shape than most states, but expect the Legislature to ask local units of government, such as the City of Red Wing, Goodhue County, and our local school district, to increase their contributions rates to PERA, TRA, etc.

Under current public employee retirement plans, the employer and the employee contribute to the retirement plans.  Its no secret that these retirement plans have taken a huge hit in the stock market.  Consequently, these plans are substantially underfunded.  Which basically means they can’t pay out the benefits they’ve promised.  The numbers don’t add up.

So, units of government, and employees, will be told to increase their funding of the retirement plans.  The problem is this;  local units don’t have the funds to increase contributions, so they will increase local property taxes to pay for this, meaning you pay.

While I am empathetic to the plight of public employees, my retirement account has taken a similar hit, and frankly, I’m not eager to fix other pensions before I can fix my own.  Where is the shared sacrifice?

What really burns me is that these funds, PERA, and TRA have been handing out cost of living adjustments to retirees all the while the stock market tanked and pension fund balances were evaporating. These pension funds handed out 2.5% COLAs each of the last two years. How do you hand out COLAs when your fund is down 25%?  Incredible.

This is an issue that will likely not show up on the front page of any newspaper.  Let your legislator know what you think.  Stop the COLAs, temporarily reduce benefits, and the funds should soon be healthy again.

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6 Comments

Filed under Accountability, Economic Development, Minnesota, Red Wing, Red Wing City Council, Red Wing Port Authority

6 responses to “Unfunded Benefits Dig States’ $3 Trillion Hole: Bloomberg.com

  1. ITs so damn hard to grow old and affluent in society of todays being old in America!

    What I see going on is a pacificatuion into the politics of the aging yet growing absurbly old.

    Ralp Robin is an American poet: He reckoned with psychologically that our sensibilities concerning the latter life had been dulled and diminished by fear and denial,disttaste and bitterness.

    THe only thing I see going on here is the American society is try to do best to survive.

    THis is what I think is going on today: That they has been a appropraite provision for all high risk groups (Children, disabled, sick, and elderly) and those in which classes (income) they may be in.

    THe white house office thinks on their list of “a perfect heath-care plan: a representatation into cases of chilldren, disabled, sick and elderly is to build and implement a national policy meaning the flexibility throughout the life-cycle,for elderly,disabled, sick, and chlidren will be provided by State intuitions from Federal agencies

    Get me if i’m wrong: Just trying to understand the whole picture.

    If someone can give me more understand come right in!

    Comments?

    – Nick

  2. Anyways! I’ll go on a little more about pensions

    Right now in our United States we have three techniques of public suppoet “That they are operative”. Social Security/Welfare/Supplemental Security Income!

    IF you want to be a politician you have to ask yurself: Is the Retirement system a good model to have /perchance if you like the outcomes or not. “pension”. We purchase private pensions/get pensions from military injustice – Those that are Federal Regulated: REGULATORS!

    The thing about a private pension is that its large and reservoirs a unregulated wealth in the American Ecomony

    We must obtain favorable tax treatment to those citizens so that the Internal Revenue Service will file a special form stating moo-nay be solely benefit of the employees

    I dont know whare I’m going with this but –

    Employers I dont think are required to place enuff moo-nay in the funds to cover promised pensions

    Eh

    I mean: bargin:- Whatever the erosion of inflation may be: Especially those unions! They must be able to bargin on own behalf!

    Its a vicious cyle: Wheels spin/tires spin!

    The be things you can do

    Private pension reforms/federal pension reforms and what not! it’s just the ride up into the political spectrum! =)

    hehe Catch my drift!

    I am Kents! little seed – and will volunteer my un-capital letter, unless capital to this public forum

    Thank you very much

    To all: A GOOD NIGHT!

    – Nick

  3. sueinmn

    It seems to be unequal treatment for taxpayers (general population) to have to make up the losses of certain funds while we ourselves suffer our own losses. Priority treatment because you happen to be under the employ of the government? Perhaps the banks need to be held accountable for their Vegas type gambling of the publics funds. They should be made to pay back for irresponsible bets (fast track profits) and should not be allowed to gamble “others” monies. Nick you talk about Unions, not all unions are receiving the same treatment. Public employees unions are treated with preferential treatment while the private sector are left to fend for themselves. I have been a union activist all my life and have become to believe that political corruption runs all! We simply have lost our way and the American dream is no more. An honest person trying to make an honest living is simply beated down to the point of giving up as political corruption world wide has spread so deeply. Survival of the fittest as the general population is pushed asside. Most of my past raises have gone to boost up the retirees HC and Pension plans while my own suffers its losses. And now why should public employess lay this burden on the private sector? Because they can! Its wrong but until we revolt, it will continue. Then when you also have private employers NOT making committed contributions and underfunding is an issue, no one is addressing these losses. Again priority only goes to government employees. Our Constitutional given “rights” to prosperity and happiness is a load of crap as we are taxed to death.

  4. Good job Sue! Lemme take a few days and think this to myself!

    What is life with no tax at all?
    What would life be like with tax for all?

    I’ll quit here =)

    Comments?

  5. sueinmn

    Nick, I never minded paying tax, my share. (until it is abused and we pay others shares and also pay for special interests to pay none.

    • Thanks Sue:

      I dont understand how taxes get distrubuted around

      Is there any information you can provide me and others within Kent’s myredwing for understanding?

      A website/article/or discussed in your own words?

      All the help you provid is taken with much needed respect

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