Ignoring pension crisis … again‼️ Both Republicans and Democrats are screwing the average taxpayer for votes

Read the following carefully. I know, you have heard it all before. It’s not a new story, many states and localities are in the same boat. But there is a common theme; politicians (mostly Democratic), making unaffordable promises to gain Union support and votes and then failing to fund the commitments, which requires higher taxes.  It is outrageous and more so because voters keep electing the same people thus rewarding incompetent, greedy behavior. And for the most part voters support the unions; after all, these are teachers, firefighters and police officers, they deserve more … right?

Why is this important to you even if you don’t live in an affected local? Because you can apply the same general scenario to Social Security, Medicare and in the future to the Affordable Care Act.

Each are massive growing liabilities, each are promises to Americans, each require (or will require) more income or lower benefits to meet those commitments and politicians do not have the guts and voters not the integrity to face the reality.

Instead, the main initiative is simply get more money from the wealthy; like the state’s where the answer is not to align government and private sector benefits and pensions, but to raise income, sales and property taxes. In the example below and in other cases as well the Republican response is to convert to a 401(k) plan. The Democratic notion is the usual avoid the problem solution, in this case fire the money managers and take out a $3 billion bond which means borrow money to pay other money you owe.  Both of these so-called fixes are wrong, nay stupid.

Voters deserve what they get‼️

Somehow, someway, every retired American needs a steady income stream in the form of an annuity in addition to Social Security and in addition to a good nest egg. But this can’t be accomplished for some at the expense of others. 

If you don’t believe me, just talk to retirees who have such an arrangement and those who do not and ask each group how well they sleep at night and how secure they feel.

Everyone agrees that Pennsylvania has a funding problem with its two biggest public pension systems, the Public School Employees’ Retirement System and the State Employees’ Retirement System. They are in debt to the tune of about $50 billion total.

The problems began back in 2001. With the stock market riding high and pension funds rolling in profits, Gov. Tom Ridge and members of the state Legislature increased pension benefits for teachers and state employees by 25 percent. Legislators also gave themselves a 50 percent bump in their pension benefits.

Then, when the state had some difficulties with its budgets several years later, legislators declined to make the state’s annual contributions to the pension plans. With state employees continuing to make their contributions, the pension funds remained profitable until the stock market began tanking in 2007. The pension funds soon turned from black to red, where they’ve remained ever since.

Concerned that taxpayers could be saddled with huge tax increases to make up the deficits, Republican legislative leaders and Gov. Tom Wolf have come up with proposals to tackle the problem.

And to absolutely no one’s surprise, the plans differ greatly.

Republican lawmakers, including local state senators Pat Stefano of Bullksin Township and Camera Bartolotta of Monongahela, want to move new state and school employee hires into a 401(k)-style pension plan, providing up to a 5 percent employer match. They point out that many private businesses have had to take similar action, noting that few companies offer defined pension payments nowadays. They add that switching to 401(k)-style pension plans would alleviate any long-term financial problems for taxpayers.

Democrats, however, contend that such a plan would do nothing to solve the immediate problem of pension deficits. Most of the employees involved with the pension funds are union workers with legal contracts that can’t be broken. They note that the new pension plans wouldn’t take effect for at least 20 to 30 or even 40 years when the new hires retire. In the meantime, without contributions from new hires, the current pension would go into even further debt, leaving taxpayers to foot the bill for the financial cleanup.

via EDITORIAL: Pa. can no longer afford to ignore pension crisis.