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Take NYC or California: a mass exodus of people leaving, and increase in existing rates on the remainder of the people. So where does the money come from for pensions when it dries up? Per social security guidelines, they don't even have to pay out, it's merely a request that can be accepted or denied (virtually no one knows this small issue), and the pension can always use many tricks to not pay out: using outrageous demands to fire your ass (IBM), liquidating the pensions early for pennies on the dollar (Prudential), using placeholder IOUs that will never get paid (Illinois), hyper inflating the currency to oblivion (Weimar, Rome). Which one will it be?

Take NYC or California: a mass exodus of people leaving, and increase in existing rates on the remainder of the people. So where does the money come from for pensions when it dries up? Per social security guidelines, they don't even have to pay out, it's merely a request that can be accepted or denied (virtually no one knows this small issue), and the pension can always use many tricks to not pay out: using outrageous demands to fire your ass (IBM), liquidating the pensions early for pennies on the dollar (Prudential), using placeholder IOUs that will never get paid (Illinois), hyper inflating the currency to oblivion (Weimar, Rome). Which one will it be?

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[–] [deleted] • 1 pt

Pensions are only used in government at this point but they always came off as a crooked deal

  • The pension guarantees a certain rate and contributions are added and matched to a large extent. However, if the contribution obligations don't match what's on paper, who is paying the difference? It would be the fed banks and the taxpayer. How do the pensions get funded then? They would need to increase the taxes to make up the contribution difference. Or in the case of NYCERS or CALPERS, they will need a full on bailout to make ends meet, on top of increasing taxable rates. Even if they phased out pensions tomorrow, they would still be on the hook for TRILLIONS in pension liabilities.

  • Pensions are NOT state locked which makes them ripe for abuse. Too often you hear people cashing out pensions and leaving to a low cost of living state, whilst still holding the original state on its obligation. If the pensioner has no obligation to its own state, why should the state? Not saying the state is perfect in any way, but the imbalance is a very clear problem, as this mechanism is what causes capital flight from states. This imbalance also comes off as a great way for (((them))) to nationalize the retirement system by claiming liquidity problems are caused by the pensioners, and not the pension system.

  • Pension tenure laws are way too lenient. Most pensions will pay out after 20 years of service. What this means is a 38 year old can retire if he commits to service at 18. This is NOT sustainable, as the pension needs to payout for 50+ years of this person's life, for having worked half those years in total. The rules are changing slightly, so the yearly tenure amount is going up, however, even working for 30 years and retiring skews the ratio to an almost 1:1 ratio on years worked vs retirement.

  • Pension rules use top 3, which means if you max out overtime you're retirement will be based on the three highest earning years of your tenure. Why this is allowed is just beyond me, and it must have been baked in due to unions, blatant embezzlement, and fraud. However, this again skews the window of the pension system, as a 45,000/yr job can end up with a pension for a 100,000/yr job just because of OT rules and laws. I think this may have changed more recently, but not sure