Buying an annuity, representing a year's worth of work does not solve
yesterday's unfunded liability problem, only tomorrow's. Insurance
companies are a good resource, but annuities purchased through some sort of
government RFP process reeks of political influence and interference. A worker
could retire with 30 or 40 individual annuity contracts. The Rules for Defined
Benefit pension plans would have to be re written altogether should this
proposal be adopted. Correcting profligate spending and promises made for
political expediency is what needs to be done. If we look to Washington to
correct those, then we will suffer consequences that are more severe than
@mike richards. Banks do not have money and they do not use deposits to make
loans. They create money out of thin air to lend. It is called fractional
A lot of people worked in lower paying jobs for the security of having a
pension. Most public employees are in that situation.If you stop funding
pensions then they had better put a large bump in the employee's paycheck.
marxist,your comment about a lifetime of service would have merit if
public employees provided a lifetime of service, or even a ful career of
service. Many don't; many have 20-25 service requirements before they are
eligible for retirement.I don't know about you, but I am good
for more than 20-25 years of service; I plan to have at least 35 years, if not
more, when I finally hang it up.Ranch, thanks for the clarification.
@Lost;You are correct. I only mentioned Republicans, but the
article was specifically about Hatch (a Republican) and I used Buttars (a
Republican) to demonstrate the golden parachutes that legislators grant
themselves at the public's expense - and in his case, after only 10 years.
Dems are as complicit in the farce as are Reps.
Utah has done just fine in managing is pension fund. In fact it has performed
much better than much of the private sector.
It's just more "smoke and mirrors". Government should not penalize
savings accounts. Money put into long-term savings helps the economy.
Insurance companies invest that money. Banks lend that money. Where do you
think the money comes from when you get a mortgage to buy a house? The builder
is paid with borrowed money. That money represents the savings accounts and
stock market investments of millions of "John Does". In
order to receive an annuity, you would have had to pay into that fund for years
and years so that the insurance company could have invested your money and
received gains on that money. Businesses and governments that rob Peter to pay
Paul haven't invested any of that money. They're paying out money as
soon as it comes in. They have nothing to offer an insurance company.If Hatch were serious, he would write a law making it a felony to promise a
pension without funding that pension fully.I agree that pension
money should follow the employee. Changing jobs should not be hindered becaus
of loss of pension.Keep government out of private sector pensions.
Prosecute pension managers who mismanged pension funds.It's
How does this fix anything? The problem with pension funds is that back in the
day you could put in $.50 and expect $1 in return by retirement age(in real
world math, not the nonsense it's actually "calculated" on). Now
it's pretty much a 1 to 1 ratio due to crazy low interest rates. Combine
that with a major loss of capital in 2008 and that's why we find ourselves
in this mess. Privatizing does nothing to correct this.
Hatch's proposal does little or nothing to restore the pension system,
which for a time fulfilled our promise to the elderly after a lifetime of
contribution. The future for the elderly, as our system decays, is a chamber of
RanchHand,you only named repubs, and since reid and pelosi have done
nothing to actually serve the public, I wanted to make sure they were
included.Thanks for the clarification.
@lost in DC;Of course. Did I say only Republican public servants?
No, I said "public servants" (the "all" is implicit).
This is a good plan as an option in case budget problems limit what payments can
be made to states. If federal tax dollars to the states are cut the states will
need to have an alternative and the best alternative may be this option even
though no options are great if state funding is cut.
lost in DC and Twin Lights have it right. If the govt plans are underfunded,
where will the money come from to buy annuities from private companies ?
I have to agree with Lost in DC. This proposal may offer a way forward for
current pension funding, but I don't see how it solves the problem of the
existing unfunded pensions.Insurance companies writing the annuities
will want cash up front and they are averse to using the gamed rates of return
that states used to get themselves into this mess. It would seem that the
states would have to come up with huge amounts of cash in order to offload their
responsibilities to the insurance companies.There is a simple point
here. The states knew they were using unrealistic rates of return. They knew
they were under-funding their pension plans. They did so in order to keep tax
rates lower than they should have been. Now the piper has come to call.
It is natural for a businessman to recommend privatizing government because
government services to the public not only increase costs to business from the
taxes but deprive businessmen of the opportunity of profit. The
fact that private service cost the consumer more than when the government
provides the service is of no concern to the businessman.
RanchHand,yeah, transfer pelosi and reid's pensions, too.
Will Hatch's retirement account be transferred? How about that of Chris
Buttars, who retired immediately after hitting the magic mark where he gets a
lifetime pension and health care for having "served" the public?"Public servants" at even the highest levels should share the
I think the DN is trying to give hatch as many accolades as possible during his
final term - at least he said during his campaign it would be his fianl term,
though I wouldn't be surprised if he chose to run again in 2018.hatch's plan offers a solution to nothing!how does it address
the shortfall in funding? it doesn't.all it does is transfer
management from the state to a private entity. one can argue the pros and cons
of private vs public management, but that is a different debate.the
problem with public pensions is they are underfunded, and hatch's plan does
not address that core problem.the current fix many municipalities
are taking is to declare bankruptcy, trying to remove the enormaous pension
obligations they foolishly put themselve in.
The private-sector has problems of it's own with pension funds. Leaders
should be sent to jail for not funding them fully. It's part of their