Kinja reply list

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ReburnsABurningReturnsHamilton Nolan
7/20/16 2:40pm
Why do you think that so many state pension funds set such unrealistic return expectations?

Full disclosure: I’d classify this question as semi-loaded, though I really don’t have a super strong or politicized opinion about this.
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  SrynersonReburnsABurningReturns
  7/20/16 2:44pm
  My understanding is that it’s largely driven by politicians trying to reduce present expenditures on salaries. You offer state employees lower salaries at present, but tell them that they will get great pension benefits at retirement, so it will all work out in the long run.
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  FauxhemianRhapshodySrynerson
  7/20/16 2:49pm
  Also it was done to reduce budget expenses. Many state and local governments have underfunded for a generation now for a number of reasons. One of them was to reduce tax increases.
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The ever-present football-player rapistHamilton Nolan
7/20/16 2:36pm
Investing is a scam, period. Infinite growth isn’t sustainable.

The only sensible thing to do is save.
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  ElroyJenkinsThe ever-present football-player rapist
  7/20/16 2:37pm
  spoken like a true white man. save what
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  O frabjous day! Callooh! Callay!ElroyJenkins
  7/20/16 2:41pm
  What a bullshit response. People of all backgrounds know how to save. Get a fucking grip with your projected racism. Just because YOU don’t know how to save doesn’t mean someone who can is shitting on you.
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Endless Supply of CynicismHamilton Nolan
7/20/16 2:38pm
Usually siding with republicans is against my moral code, but in this case, they’re not wrong. Defined benefit plans are stupid.

You can’t predict how things will look in 30-50 years down the road, why are you guaranteeing someone’s income way beyond what you know you’ll be able to pay?

Defined contributions plans simply make a ton more sense and don’t leave taxpayers on the hook when the local, state or global economy goes to shit.
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  levarienEndless Supply of Cynicism
  7/20/16 2:47pm
  Yet the Republicans generally frown upon what goes along with cutting defined benefits pensions: Increasing current benefits, especially when those who receive defined benefit packages are usually government and other public sector employees.
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  Dusty Baker Street IrregularsEndless Supply of Cynicism
  7/20/16 2:50pm
  My understanding is that often times retirement benefits/pensions were offered a way to keep contemporary salaries in check. A version of a favorite American game - kick the can down the road.
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jamesjhareHamilton Nolan
7/20/16 2:50pm
“and not those who don’t need it because they are wealthy”

That is a recipe for the death of social security. Better to raise the earnings cap AND raise the payout cap and make everyone pay into the system fully. As-is we give rich people a huge break on SS taxes. On top of that pensions should be fully funded and we need to bring back defined benefit pensions for most workers. Defined contribution accounts have been a massive failure.
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  AM123jamesjhare
  7/20/16 3:11pm
  On top of that pensions should be fully funded and we need to bring back defined benefit pensions for most workers. Defined contribution accounts have been a massive failure.
  
  And defined benefits weren’t? DB pensions are bringing down hundreds of municipalities across the country.
  
  DC is far more intelligent, and removes the onus of failure from the government. I don’t understand this idea that anyone thinks they have a right to positive stock market returns. If you don’t think you can make intelligent decisions, don’t invest in the stock market.
  
  Let individuals be responsible for their own destiny. Lets be honest, most of the complaining about pensions is coming from the soon-to-be-retiring Baby Boomer generation; the generation that accomplished nothing, that mortgaged their own future for creature comforts and vague platitudes
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  jamesjhareAM123
  7/20/16 4:36pm
  Individuals cannot be trusted to manage their retirements. Defined contribution is a failure on its own terms. We as a society don’t want to see senior citizens eating cat food and dying in the street so all this “let individuals be responsible” is so much nonsense. Hell should someone be impoverished throughout retirement because they had the bad sense to reach mandatory retirement age right after a stock market meltdown?
  
  Better to acknowledge the reality we live in where retirees and near-retirees are still the most reliable voting block and come up with a way to meet their needs instead of paying more to do it later. Bashing boomers doesn’t change reality — Americans are not going to let mom and dad (or grandma and grandpa) starve to death just so young people can feel morally superior because they’ve got PERSONAL RESPONSIBILITY.
  
  We have Social Security because we ALREADY had this debate as a society and came to the answer “don’t let grandma and grandpa starve.” It is still a massively popular program. Just put more money into it and let the dang thing work. Everything else is bullshit social engineering that doesn’t work.
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butcherbakertoiletrymakerHamilton Nolan
7/20/16 2:47pm
Dammit, Hamilton, stop lumping private pensions in with public ones. If you’re going to point out the very real problems with public pensions, then call them “public pensions”, not just “pensions”.
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  PeteRRbutcherbakertoiletrymaker
  7/20/16 3:06pm
  You can’t get a bailout if they define the problem as primarily being with public pensions. And a bailout is what the progressives want.
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  butcherbakertoiletrymakerPeteRR
  7/20/16 3:18pm
  Why not? Conservatives certainly have no trouble advocating for bailouts of private banks.
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NOTthatIowaFanHamilton Nolan
7/20/16 2:38pm
That wooden nickel is a mile from my house! I signed up on Kinja to tell everyone that
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  ninjaginNOTthatIowaFan
  7/20/16 2:43pm
  Welcome, friendly Iowan!
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  butcherbakertoiletrymakerNOTthatIowaFan
  7/20/16 2:50pm
  Are you crazy?! RUN! Save yourself from the Kinjapocalypse!
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Quasar FunkHamilton Nolan
7/20/16 2:42pm
My father-in-law (RIP) was screwed out of about half of his pension about ten or twelve years ago. He was a crane operator at a steel mill and was forced to go back to work making shit money doing manual labor, which ultimately contributed to his poor health and passing.

This has been a problem for blue-collar/middle America for some time now, but of course those pensions aren’t even around anymore. I’m lucky enough to have a decent 401k (for now!), but the idea of a pension is as foreign to me and many in my neck of the woods as public health care or free college.

I can’t even imagine they’ll exist at all in another decade or two.
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  crayoneaterQuasar Funk
  7/20/16 2:45pm
  A friend’s dad was in a contractors union that got screwed during the Enron era. I vividly remember him saying, “well, I guess in working til I’m dead!” before opening a beer.
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  handmadeproteinshakeQuasar Funk
  7/20/16 3:06pm
  Not sure. Depend on the industry. Coke has a rather decent plan. Most Government entities still offer them. Many other older companies both offer them and do a decent job of managing them.
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GrumpyEagleHamilton Nolan
7/20/16 3:23pm
Makes me think of my in-laws, both of whom are retired teachers whose pension benefits let them get in at least one international trip a year, along with a few other junkets to visit family and elderhostels in between. Their favorite topic of conversation (besides that Muslim Obama) is the terribleness of the unions and how awful taxes are. Like many Republicans, they have a severe irony deficiency. They once asked my husband and I what our pension plans were like and we laughed and laughed.
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  DisinterestedPasserbyGrumpyEagle
  7/20/16 4:45pm
  “I got mine.” - the motto of the GOP.
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The Devil Drives a Mustang (Rotary Pending)Hamilton Nolan
7/20/16 2:50pm
This tends to cause them to reach for ever-more-exotic investments—hedge fund, private equity, etc.

Etc including giant luxury condo towers in downtown Dallas.

The Dallas Police and Fireman Pension investment fund owns the Dallas Museum tower for pretty much this very reason. It hasn’t gone so well.
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  FoleyThe Devil Drives a Mustang (Rotary Pending)
  7/20/16 8:23pm
  The problem is that those exotic investments don’t perform better than the index funds and index funds also don’t have the huge fees. Historically everyone would be better off just putting it in a few index funds and leaving it alone. Historically 7.5% is quite reasonable for that.
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questionmarkloveJRPHamilton Nolan
7/20/16 3:17pm
Can anyone weigh in on example on how, if we accept more reasonable investment projections, a pension plan might make up for the shortfall by decreasing some of their obligations to employers? Would a pension plan that’s currently underfunded by 50% need to slash pension payments by 50%? Is there a good case study?
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  QuadPolequestionmarkloveJRP
  7/20/16 3:35pm
  a.) If a pension used 5% instead of 7.5%, the onus is on the employer to make up the difference as an expense in the current period or as a long term liability on their balance sheet until they pay up. A higher interest rate means a smaller liability for the employer.
  
  b.) It depends. You need to know the estimated life expectancy of the person receiving the pension. That information, account balance, and the interest rate with compounding periods determines the total pension liability.
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  BurnKinjaQuadPole
  7/20/16 9:43pm
  I’m sure you remember the pain and gnashing of teeth when certain funds went from 8% to 7.5%
  
  I cannot treat your reply seriously in the percent department.
  
  And like others you treat this as a corporate problem. When corporations have slashed and burned this problem away in the last ten years. Cities and states are on the block now.
  
  Cutting the actuarial tables to 5% is kinda a dick move. And will inspire/create a new class of poor people.
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