Sunday, December 26, 2010

What Will Happen When Social Security Runs Out


Except it will be a whole lot larger and bigger.

But don't worry. You keep watching American Idol and reusing bags when you go grocery shopping. I'm sure that will save us.


Chemist said...

"Maryland is considering a proposal to raise the retirement age to 62 for all public workers with fewer than five years of service."

Did I get this correctly? They are proposing that one can start working for the state of Maryland at age 57 and collect a pension at 62? Work for 5 years so you can collect a pension until you die at age 85. This is supposed to represent some sort of radical cut designed to save the pension plan? What exactly is the current system?

Anonymous said...

Here's the best part:

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.

So, "too young for social security" likely means this guy retired in his fifties. Apparently, he preferred to DIE rather than get off his butt and get a job to tide him over until social security kicks in. And he was too proud to ask for help, but he wasn't too proud to quit working in middle age and sponge off the taxpayer for the rest of his life.

This is how evil this big-government notion is: it takes away your very survival instinct.

Anonymous said...

Oh you can expect a lot worse then what is stated in the article. Check back to when FDR nationalized gold. People were required to open their safety deposit boxes in front of their bank manager.Gold coins were then turned over to the bank and given to the federal government. All gold had to be turned into the federal government.
In modern times do not be surprised to see private pension plans and 401Ks confiscated by Federal and State governments. Currency controls are another item to look out for. The current money laundering laws can very easily be converted into full currency controls.
Google FDR`s gold nationalization program, and you will soon realize how ugly things can become. Even in the so-called land of the free.

Anonymous said...

I'd suggest the public sector do exactly what the private sector has done with pensions.

Most private sector pension plans (except those with unions) have been frozen.

Most private plans do not have COLAs.

Private pension plans have strict government mandated (advance) funding requirements and pay insurance fees into the Pension Benefit Guarantee Agency. Under the PBGA, if a plan goes insolvent, the maximum pension benefits are severely pruned, which causes lighly paid people like executives get theirs pruned, while middle and low paid people don't get pruned.

Most private plans require 30 years of service to receive a full pension, many plans have age 55 and 15 years of service criteria to receive a full pension. None of this 20 years of service and you get a full pension like many public sectors have.

Most private plans will allow you to take the full pension no earlier than 65. If you take pension earlier, then your payout is lower.

Since private sector plans are all but frozen, all employees are eligible for a 401K and an employer match of a part of their contributions. Keep in mind that many employers stopped the employer match during the economic downturn.

Some public sector plans also bumped pension payouts based on the plan's investment income, but never decreased payouts when investments lagged or lost money.

In summary:

a) Freeze the pension plans now.

b) Provide 401K plans with a reasonable (similar to private sector) employer matches. In tough financial times, the match could be suspended.

c) New employees get the 401K plan only.

d) Drop COLAs for pension payouts.

e) Apply similar full pension eligibility rules as the private sector does.

f) Administer pension payouts like private plans - full pension payouts start at age 65. If pension payments are started earlier, the payout is smaller.

Personally, I think public employees should have comparable pay and benefits as employees in the private sector.

The big problem with implementing this would be the public employee unions' opposition.

I'd tell 'em "Go ahead... make my day. You strike, you're fired. You don't work, you don't get paid".

Anonymous said...

"The plan allowed workers to retire young, in their 50s. And its benefits were sweetened over time by the state legislature, which did not pay for the added benefits."

And we're supposed to feel bad that they're broke???

Of course the NYT has printed this in the hopes that it will inspire everyone to accept tax increases to fund those pension plans... but liberals made this bed, let them sleep in it. If the choice is between a few retired govt workers eating dog food and everyone being denied police and fire services, I say let them eat dog food!

JB1000 said...

I wonder if the pension issue might lead to the demise of the public sector unions. If the pensions are cut or abandoned, the retired union members might start voting Republican just to annoy the union leadership. And if lucrative pensions are suddenly not so secure, the current members might not be so loyal.
Lastly, if supporting the unions becomes political suicide, even the Democrats will toss the Unions over the side.