California rejects even modest pension reform | Washington Examiner
I'm no fan of taking away pension benefits from public employees who have already paid a ton of money toward their pensions and deserve what they bargained for. I'm one of them. But unless some sort of reform takes place, many of these public pension funds will become insolvent. That will put in question the adequacy of the federal insurance that stands behind most of these plans. There was a savings and loan bailout in the 1980s, and a huge bank/auto bailout two years ago. The feds are up to their necks in red ink. How can they stand another bailout? So...what are the states going to do about their unfunded pension liabilities?
1 comment:
They have no choice but to accept reductions and they better hope it's not a reduction to "0". Some of these pension promises were absurd. You can't reasonably expect guarantees on what were often outrageous promises made at taxpayer expense to begin with. As with anything there is a risk of failure of performance and that risk is going to get recognized every once in a while. However, I'm not suggesting they shouldn't get some benefits. A study as to reasonableness, salary, years of service, etc. should be performed in view of the pensions reasonable ability to pay out. That's going to mean a pay cut. However, there are plenty of folks that don't have the luxury of state-promised life pensions and who put their money into other investments based upon Wall Street representations and lost most of it. You would still be better off than those folks.
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