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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (147752)	10/21/2010 1:17:47 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 542008

Pension probs go back to 13, and raids by the pols to get money to run other things, like schools and jails. Then the pols didn't raise the employee contributions, so the fund had to go play in the Casino, where, sometimes you win and sometimes you lose. THE GREAT PENSION ROBBERY States and cities are plundering employee pension funds to ease their budget crises. Taxpayers may be stuck if the plans can't meet their future obligations. By Alan Deutschman REPORTER ASSOCIATE Mark D. Fefer January 13, 1992 (FORTUNE Magazine) – WHILE BANKS, S&Ls, insurance companies, and nearly everyone else in the financial services industry has a case of the shorts, America's public employee pension funds have an embarrassment of riches. And like a lot of wealthy folks, they are becoming the victims of holdup artists. With ever more states and cities facing nasty budget deficits, the politicians who run them are trying to grab some of the $878 billion set aside to pay for the retirement of teachers, firefighters, police, sanitation workers, and other public employees. The pilfering of the golden nest eggs is alarmingly widespread. In the past two years more than a third of the states have cut or delayed contributions to their pension funds, seized money outright from pension accounts, or begun to debate similar measures. This is no time to be confiscating pension assets. While contributions have fallen slightly over the past three years, payouts to pensioners have been rising sharply (see chart). As a result, cash flow -- the difference between annual contributions and benefits paid over the year -- has narrowed for the public funds, to $6 billion from $16 billion. According to Chris McNickle of Greenwich Associates, a research firm that compiles data on pension funds, the gap could shrink to $2 billion or less by the end of 1991. The immediate victims of any cut in contributions or attachment of assets are the public employees whose retirement funds are being raided. But taxpayers may be on the hook too: They could have to make up the difference if, thanks to the raids, public plans lack the wherewithal to pay retirement benefits in the future. The most egregious assault on pension funds occurred in California last summer. As the July 1 start of the fiscal year neared, Republican Governor Pete Wilson was staring at a $14 billion budget deficit. So to help make ends meet, Wilson decided to take $1.6 billion from the coffers of the $63 billion California Public Employee Retirement System. Known as Calpers, the fund covers most state workers except teachers, who have their own plan. Wilson also tried to replace the 13-member Calpers board with a new nine-member group that he would control. Dale Hanson, the system's irate chief executive, called this scheme a ''hostile takeover.'' money.cnn.com