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The Suddenly Poor Life: Millions Will Lose Their Pensions

mtnman

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All attempts to fix the $40 billion public pension hole for teachers and government workers in the Commonwealth of Kentucky are meeting massive resistance. Seems teachers didn't have to teach yesterday, they were in the Capital demanding everything stay the same, including for new hires.

They will not accept anything but total bankruptcy.
Kentucky Teachers are not eligible to collect Social Security so their pension is all they get.
 

gringott

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Kentucky Teachers are not eligible to collect Social Security so their pension is all they get.
Not all but most. If they work at another job in their life that is covered, and paid in, they get it, it is based on quarters.

The strange thing is that if you ask a teacher, a lot do not know that .[not covered].

My DIL did not know. After working as a teacher several years.

Also, if they are not covered, THEY DON'T PAY IN TO SS. Why would they collect?

Detriot cops did not pay in to SS and got screwed royal in the Detriot bankruptcy. My heart bleeds for them.

I guess it boils down to why would you get a benefit you did not pay for?

Does not change the point, however, $40 BILLION IN THE HOLE.
You would think our highly educated, very intelligent teachers that are so valuable could do the math.
It seems they cannot.

THAT WHICH CANNOT BE PAID WILL NOT BE PAID.
 

mtnman

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That's not what my Dad found out. He worked 20+ years as a Union Machinist then Taught Machine Shop at Ahrens Trade High in Louisville for 25 more years. He says that something happened during the Carter years called "Windfall Elimination Provisions". So he only gets the Teacher pension and no SS.
 

gringott

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Here is a link to the windfall elimination provision
https://www.ssa.gov/pubs/EN-05-10045.pdf

Very complicated. Looks like this came down in the mid-1980's.

I don't know your father's age nor do I know his years of employment, but my read of this act would mean his benefits under SS would be reduced, not eliminated. The link I provided has an explaination of why it came about. Of course, the link uses government gobbly gook so I can't be positive of the reality of how it works. However, he [your father] would of course know best. But guessing from what you posted, a Union machinist with 20 years I would think gets a pretty good pension, correct me if I am wrong. Did he not have a vested retirement? I can understand that, I worked union for the railroad and construction, both took retirement contribution money but I never got anything.

Here is a link to figure out how much the SS benefit will be reduced:

https://www.ssa.gov/planners/retire/wep-chart.html

If you paid Social Security tax on 30 years of substantial earnings you are not affected by WEP.

The calculations are done for reduction before COLA, so COLA is not reduced.

For example, a person who reached 62 in 1990 and had 25 years of substantial earnings [paying SS taxes] would have his SS benefit reduced by $89.

You said 20+ years as a machinist, so if he never did any other work [paying FICA] than that, and reached 62 in 1990, his SS benefit would be reduced by $178, based on 21 years.

*Important: The maximum amount may be overstated. The WEP reduction is limited to one-half of your pension from non-covered employment.

So based on that chart, even if he had less than 20 years of substantial earnings, the maximum reduction is $447.5, based on retiring THIS YEAR, 2018.

However there is this note as well:

Note: If your retirement benefits start after full retirement age or your non-covered pension starts later than your ELY, the WEP reduction may be greater than the maximum shown in the chart.

So we would have to know if he was starting SS at full retirement age or if he started his pension after he was 62 to determine what is going on.
 

searcher

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America’s Pension Crisis Is About To Detonate


-- Published: Sunday, 4 March 2018

By Dave Kranzler

Dr. Paul Craig Roberts sent me an article by Catherine Austin Fitts and asked if I had read it. The article is titled, “The State of America’s Pension Funds.” The article is worth reading, though I believe Ms. Fitts underestimates significantly the degree to which political and Wall Street criminality – along with money management incompetence – has infected and destroyed the U.S. pension system – both public and private. Furthermore, I believe she errs in her believe that the pension crisis can be fixed.

I’ve re-posted below my view of the looming pension system melt-down that I shared with Dr. Roberts.

“My guestimate for the amount stolen or shifted illegally through these mechanisms is $50 trillion, although I can argue the number higher.” I agree with her assessment there.

Craig, I concluded in 2003 that the elitists would hold up the system with printed money and credit creation until they had swept every last crumb of middle class wealth off the table and into their own pockets. Back then, I said housing was next asset to be drilled and cored. Let’s review: The first bubble removed at least $5-10 trillion of wealth from the public via the bailout of the banks and the wealth lost by people who chased home prices higher and then lost those homes to foreclosure or short-sale. Most of those homes are now sitting in the rental portfolios of large Wall Street investment funds like Black Rock and Colony Capital.

I also concluded that the last remaining middle class asset was retirement funds (Pensions, 401k’s, IRAs) and that looting that asset class would be the elitists coup de grace. Retirement assets are by far the largest middle class asset in aggregate (something like $20 trillion now). Let’s review: Every dollar of under-funding is a dollar of wealth transferred away from the pension plan members to either current beneficiaries or the promoters of the fund investments. A lot of money is also paid to “professionals” who skim huge salaries and benefits to put money to work with hedge funds and private equity funds, most of which will be wiped out in the next big bear market.

I have a close friend who works at a pension fund. It’s an off-shoot of a big State pension plan which happens to be one of the more underfunded pension funds in the country. My friend has to be a member of the pension fund as an employee of the fund he helps manage. He told me that as of Jan 1 he now has to contribute 12% of his pre-tax income to the pension fund. It’s criminal. That’s in addition to the amount his employer has to match. The money helps fund current beneficiary payouts. He needs his salary/job to support his family so he does not have a choice but to keep working at his current position unless he can find something else that pays equally as well. The job market for investment fund analysts is extremely difficult right now. His wife has to work for them to make ends meet (their kids are all under 12)

Based on a detailed study he did internally, he estimates the true underfunding of all public pensions in aggregate is at least $8 trillion. Not the $3.5 trillion referenced by Catherine Austin Fitts. He’s an insider and has access to better data than the outsiders and academics who have done studies that conclude $3-5 trillion of underfunding. THAT’s with the stock AND bond markets at all-time highs. How in the hell is that possible? The difference, or funding gap, is the wealth that is being confiscated.

The under-funding device is a very subtle and brilliant mechanism of wealth transfer. No one thinks about it that way but that’s what it is. A massive wealth transfer mechanism.

I worked for some of these insiders at Bankers Trust. I can tell you first-hand, for a fact, that these people will do ANYTHING to take money from ANYONE, legally or illegally. I saw this first-hand. They are all very bright, well-educated and completely devoid of morals or ethics. My direct boss was like that and everyone above him was even worse. They hate nothing more than leaving, literally, even dimes and nickels on the table.

That’s why the system is doomed.

http://investmentresearchdynamics.com/americas-pension-crisis-is-about-to-detonate/

http://news.goldseek.com/GoldSeek/1520176053.php
 

Goldhedge

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huuughe report


The State of Our Pension Funds

Posted by CATHERINE AUSTIN FITTS on JANUARY 22, 2018

“Money is and always has been political. Our central concern should not be with [money’s] technology but with the political and legal framework with which it operates”. ~ Dr. Rebecca L. Spang

By Catherine Austin Fitts
Table of Contents

I. Introduction

II. Global Pension Fund Assets

III. US Pension Fund Assets

IV. A Comment on US Pension Fund History

V. Recent Global and US Pension Fund Performance

VI. The Pension Fund Crisis Narrative

VII. My Financial History as an Alternative Narrative

VIII. Total Economic Returns – Why Are We Financing Governments, Companies and Products and Services with Negative Returns?

IX. Other Issues

X. The Bottom Line

XI. What Can I Do?

XII. Appendix
 

searcher

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New Jersey Prepares To Raise Taxes On "Almost Everything" As It Nears Financial Disaster


by Tyler Durden
Tue, 03/13/2018 - 19:20


Last week we noted that in what was a radical U-turn to what other public pension funds have been doing in recent years - most notably Calpers - the struggling New Jersey public pension system decided that instead of lowering its expected rate of return, it would raise it, from 7% to 7.5%.

The simple reason behind this odd increase in projected returns was an accounting sleight of hand which would allow the state of New Jersey to save some $238 million in pension contributions as a result of the higher discount rate applied to the fund's liabilities. And with a pension funding level of only 37% for the 2015 fiscal year, the worst of any state in the US, New Jersey would gladly take even the most glaring accounting gimmickry that would delay its inevitable death.

Unfortunately, being the not so proud owner of the most distressed and underfunded public pension fund in the US is just the start of New Jersey's monetary woes, and as Bloomberg reports, New Jersey's fiscal situation is so dire that new Governor Phil Murphy has proposed taxing online-room booking, ride-sharing, marijuana, e-cigarettes and Internet transactions along with raising taxes on millionaires and retail sales to fund a record $37.4 billion budget that would boost spending on schools, pensions and mass transit.

The proposal which is 4.2% higher than the current fiscal year’s, relies on a tax for the wealthiest that is so unpopular it not only has yet to be approved, but also lacks support from key Democrats in the legislature, let alone Republicans. It also reverses pledges from Murphy’s predecessor, Republican Chris Christie, to lower taxes in a state where living costs are already among the nation’s highest.



Murphy, a Democrat who replaced term-limited Christie on Jan. 16, said his goal is to give New Jerseyans more value for their tax dollars; instead he plans on bleeding them dry. He has promised additional spending on underfunded schools and transportation in a credit-battered state with an estimated $8.7 billion structural deficit for the fiscal year that starts July 1.

“If we enact another budget like the one our administration inherited, our middle class will continue to be the ones shouldering the burden, while seeing little in return,” Murphy said Tuesday in his budget address to lawmakers. His solution? Socialist wealth redistribution: "A millionaire’s tax is the right thing to do –- and now is the time to do it."

A better way of putting it, as Bloomberg has done, is that New Jersey's budget "would raise taxes on almost everything."

Of course, that is not a politically palatable thing to say, so let's first crush the millionaires; the same millionaires who - like David Tepper in April 2016 - have decided they have had enough and departed for Florida long ago, taking with them hundreds of million in foregone taxes. Because what New Jersey fails to grasp, is that the truly rich can pick up and go at a moment's notice, and transfer to any place in the country (or outside of it) that actually does not endorse daylight robberies.

Meanwhile, the idiocy proposed by Gov. Murphy counts on total revenue growth of 5.7%, an impossible number and the most since at least 2013... when it fell short. Murphy would increase the tax rate applied to income above $1 million to 10.75 percent from 8.97 percent, generating $765 million; and restore the state’s sales tax to 7% from 6.625%, raising $581 million.

Guaranteeing that the state's hedge fund residents would promptly flee, the budget would also "gain" $100 million by closing a carried-interest loophole on hedge-fund income.

He must be kidding,” Senate Minority Leader Tom Kean Jr., a Republican from Westfield, said after the speech. “I don’t think anybody could have anticipated this level of tax increases.”

So where would the money go?

Murphy’s proposal would almost triple the direct state subsidy for New Jersey Transit, which has been plagued by safety and financial issues. Including funding for the agency from the state’s Turnpike Authority and an energy fund, he boosts money for New Jersey Transit by about a third.

His plan also includes a move to raise the state property-tax deduction to $15,000, which would benefit about one-third of homeowners, according to a budget summary. It also would create a child-care tax credit and increase the earned-income tax credit.

The budget also plans for four-year phase-ins of a $15 minimum wage and full school funding as mandated by the state Supreme Court, and a three-year path to make community college tuition-free.

Oh, and speaking of the above pension woes, guess who will be on the hook to make the state's public workers whole? Why taxpayers of course as the budget includes a record $3.2 billion pension payment, putting the state on course to resume full funding by 2023, according to budget officials.

And though the short-term effect may be positive, between the taxpayer subsidy and the idiotic hike in return assumptions, it won’t fix a system with a combined unfunded payments and medical-benefits liability that reached $184.3 billion in 2017, according to a March 5 commentary by S&P Global Ratings. The two biggest funds are forecast to be broke in 2024 and 2027.


“You kept hearing the same word: investment, investment, investment,” said Assembly Republican Leader Jon Bramnick, from Westfield. “Let me interpret that for you: It’s taxes, taxes, taxes.”

* * *

Unfortunately for New Jersey, it may be too late: according to Bloomberg, Murphy met with the major ratings agencies in New York earlier this month to outline his financial plan (New Jersey’s credit rating is the second-worst among U.S. states, trailing only Illinois). That however won't stop the local democrats from trying.

Senate President Steve Sweeney, a Democrat from West Deptford and the highest-ranking state lawmaker, was a perennial sponsor of a millionaire’s tax during the Christie years, only to see the governor veto it seven times. In the wake of President Donald Trump’s $10,000 limit on state and local property-tax deductions, though, Sweeney says the extra charge would drive more wealth from a state that already has the nation’s highest property taxes.

Yet what is strange, is that the two top wealth redistributors, Sweeney and Murphy, now disagree on how to fatten state coffers. Last week Sweeney outlined a proposal for a 3% surcharge on corporations earning more than $1 million annually, for an estimated $657 million. Murphy said he wouldn’t accept it as an alternative to his plan.

Sweeney, in a joint statement with other Senate Democratic leaders, said Murphy’s budget “includes many ambitious proposals that are appealing, but will require thorough review and consideration to determine if they are achievable. We will maintain an open mind throughout the budget process.”

Meanwhile, Murphy’s plan for the fiscal year starting July 1 counts on $80 million of revenue from a plan to legalize recreational marijuana by January 2019. He also intends to expand access to medical marijuana. However, the governor is receiving push-back on recreational marijuana from Republicans and some members of the Black Legislative Caucus. Though polls show majority public support to make New Jersey the 10th state to allow the drug - and Murphy says its taxation would generate hundreds of millions of dollars - opponents say it would harm youngsters in poor communities and lead to increased use of outlawed substances.

Murphy’s plan to raise the sales tax likely also will be a tough sell. The last two New Jersey governors to do so, Democrats Jon Corzine and James Florio, were ousted after one term.

In short, New Jersey's democrats can't even agree how to best fleece the rich, meanwhile the state careens ever faster toward financial disaster.

https://www.zerohedge.com/news/2018...almost-everything-it-nears-financial-disaster
 

Uglytruth

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The problem with socialism is that you eventually run out of other peoples' money. Margaret Thatcher
 

gringott

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Well, the Commonwealth Legislature pulled a fast one and passed a reform bill, although they removed the real money-saving provisions for the near future. It moves new teachers to a new plan which will pay off in 30 years. Teachers [strangely not at work, most looked too young to be retired] were screaming bloody murder. So many called in sick last night JCPS [Louisville] and Lexington School System are closed today, along with a lot of schools in the eastern part of the Commonwealth. A local weatherman obviously was not happy, although I did not see it, I guess he made remarks about the inconvenience of having to arrange for the care of his children due to the late notice on the school closings. I only found out due to the "explanation" on air of his remarks, stating it was not a political statement. They were flooded with calls from teachers. LOL. Seems counter-productive to me, angering the parents of the children.

Keep in mind some districts are looking at up to a 70% increase in payments to the pension system next year. Also, Kentucky teachers are the 7th highest paid teachers in the country. I have a DIL that is a teacher, but I do not sympathize with the teachers, I understand they are between a rock and a hard place, but so is the taxpayer. Arithmetic does not lie. The system will collapse without reform. I fail to see how that is a benefit to anybody. Perhaps more evidence our teachers do not understand logic or arithmetic. Please keep in mind that this new bill DOES NOT SAVE ANYTHING NOW. The real savings are thirty years from now when new hires now retire. As for now, pretty much can kicking due to the massive protests by the teachers, as far as I can see joined by nobody else. Nobody else can take off work to protest their retirement benefits being reduced.

Again, just my opinion, but teachers are not the royalty of our lives, yet they are treated as such. Living off the backs of the serfs and proles, with an unbelievable sense of entitlement. For me, it is long past time to dismantle the public school system and create new forms of learning for our young people. Time for all these glorified babysitters to search for productive work.

There is a story in the news feed here, and here is a link to a local story.
KY Teacher Pensions
 

searcher

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'No justice! No Peeps!' Pension fight divides Pa. town
Updated: March 29, 2018 — 7:56 PM EDT




by Damian Paletta, Washington Post

BETHLEHEM, Pa. – On April 1, hundreds of millions of marshmallow chicks and bunnies called Peeps will peer out from Easter baskets at American children.

They are a pastel symbol of Easter joy, but behind the wax-eyed candy is a company at war with its union workforce over rising pension costs – an escalating legal tangle that could soon upend the retirement plans of 10 million Americans.

The fight has featured a strike, Twinkies-related bankruptcy, irreparably broken friendships, obscene T-shirts, and a locked-up Peepsmobile. Now all sides await a federal appeals court ruling.

The 95-year-old company that makes Peeps, Just Born Quality Confections, wants to block new employees from enrolling in the multiemployer pension it has offered workers for decades, a retirement plan it funds along with roughly 200 other companies.

While many other companies facing similar pressures have left pensions in recent years, Just Born wants to bar new employees from the plan without paying a $60 million fee required under federal law, saying it must do so to remain competitive.

The fee exists to ensure future retirees’ benefits are covered, and if Just Born succeeds in escaping it, union officials fear the unprecedented ruling would prompt thousands of other firms to do the same. This chain reaction could divert workers and money at a time when new employees are seen as crucial to ensure ample funding for the wave of retiring baby boomers – putting payouts for millions of pensioners at risk.

It is a fight that has divided this town, pitting the company that concocts a 28-calorie yellow spongy baby chicken against the union workers it employs. It has splintered the workforce of mechanics and candy makers who make 2 billion Peeps every year.

The company has suggested that if these changes are not made, its future in Bethlehem could be in doubt.
“To remain a sustainable business we need to continue to contain or reduce our costs in order to invest in our infrastructure, our associates and our brands,” said Matt Pye, a Just Born vice president. “Our goal is to keep producing iconic candy brands for generations to come.”

To many of the workers who make Peeps, members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union, it is a line that cannot be crossed.

“There comes a point in time when you have to take a position,” said Alex Fattore, 55, who has worked at Just Born for 37 years, and walked out during the stunning 2016 strike that escalated the feud. “You have to make a stand.”

The stand came on Sept. 7, 2016. It was supposed to be peak Peeps time, when the company accelerates production to prepare for an Easter binge that locks in almost half the company’s annual sales.

Five days earlier, at a union building in nearby Allentown, 272 Just Born employees met and voted against the company’s latest contract proposal. That offer would have directed all new employees into a 401(k) savings plan – which does not ensure benefits after retirement – and blocked them from participating in the pension.

The workers voted unanimously to strike.

The following Wednesday, Fattore and more than 100 others walked out of the sprawling candy factory that also makes the candies Mike & Ike and Hot Tamales.

They marched up and down the sidewalk, screaming “No justice! No Peeps!” again and again. The strike went around the clock.

Belt One, the first-floor marshmallow-moving sidewalk that produces most of the company’s 5.5 million Peeps per day, stood idle.

Striking workers noticed the Peepsmobile, a yellow Volkswagen Beetle adorned with a giant look-alike chick head, had disappeared from the front of the factory, to be found later locked up in a cage where it could not be damaged.

Many in Bethlehem and the surrounding area were stunned. Just Born and the union had coexisted since the 1970s without a strike. The company’s revenue was reportedly growing. In an area where steel jobs had mostly disappeared, candy jobs had endured.

Peeps are an iconic brand for Bethlehem and central to its identity. On New Year’s Eve, they do not drop a crystal ball. They drop a giant yellow Peep. The union workforce volunteers at soup kitchens and local churches.

“It’s not exactly like ‘us vs. them,’ ” said Thomas Hyclak, an economics professor at nearby Lehigh University. “It’s not like management was trying to take jobs and move them to South Carolina. This is a good company. But the workers are our friends and neighbors, too. It’s hard for people to take sides.”

The strike went on for several weeks. Candy production plummeted, workers said, but the company refused to budge. The same family has owned Just Born for three generations, and the owners had complained that personnel-related costs were rising too fast. They needed to contain these costs to keep the firm competitive with others that have moved overseas.

“Many companies are moving part or all of their operations outside of the U.S. to take advantage of lower sugar prices available outside the U.S. and lower labor costs,” Pye said in a statement to the Washington Post. “Just Born has, so far, been able to retain all of its manufacturing in the U.S. which puts us at a competitive disadvantage.”

Union workers were skeptical. Candy Industry magazine had projected Just Born’s net sales climbing to $231 million in 2016, up from $222 million in 2014. (The company would not comment on the candy magazine’s estimates.)

The union tried to hold ranks, but people started slipping away. Twenty workers crossed the picket line and went back to work. They warned striking friends they would lose their jobs if they did not return immediately. The company even held a job fair, and more than 150 people showed up, enticed by the attractive pay people could earn without a college degree.

People panicked. Union officials said Just Born hired 100 new workers, while more striking workers ran back to their old jobs, fearful of losing their careers. Longtime friends hurled verbal, vulgar threats as they ducked away.

The union’s worst nightmare was coming true – its members were splintering.

“If they break the union, do these people realize they could lose everything?” said Gordon Grow, a mechanic who spent 41 years at Just Born but retired after the strike because he refused to work with people he said crossed the picket line.

The striking workers, half of whom were older than 50, were losing money and knew their health benefits would run out in October. The strike had begun with unity but now they were wondering about the endgame. Jobs in Lehigh Valley that pay between $15 and $25 an hour for people without college degrees are hard to find.

So the union agreed to end the strike after four weeks. The damage between the company and its workforce was done. Many people staffing Belt One would not look each other in the eye.

It only got worse.

Union officials put a list of all the people who crossed the picket line on their bulletin board with the word scab written across it. It was ripped down less than two hours later.

Fattore wore a T-shirt of Calvin, a comic strip character, urinating on the word scab. He was reprimanded by management.

The Calvin image remains on the window of a union member’s truck, a daily reminder that the animus from the strike still festers – and that the issues that originally drove it remain unresolved.

The pension, which is administered by a group of labor officials and corporate executives from the 200 participating companies, has sued the company, alleging it improperly tried to stop enrolling new employees in the pension without paying the withdrawal fee. The company has sued the union, demanding “monetary damages” and alleging the strike was illegal.

Companies, labor leaders, and retirees are watching closely, because the multiemployer pension that Peeps workers depend on is one of close to 1,300 around the country.

In total, 10 million current and retired workers participate in multi-employer pensions, according to the Pension Benefit Guaranty Corp. These pensions allow employees to move from one job to another within the same pension and carry their retirement benefits with them.

Many of these multiemployer pensions are on track to run out of money. If the pension runs out of money, retired workers might only get a small percent of the money they thought they had earned through decades of work.

Further complicating matters: If one of the companies paying into the multiemployer plan falters, the other firms are left on the hook to pay even more to stabilize the fund.

Just Born’s union employees participate in the Bakery and Confectionery Union and Industrial International Pension Fund, which was flush with cash several years ago, even after the financial crisis. At one point, it had so much money that it paid pensioners 13 monthly checks each year.

The company and the pension seemed healthy, but when disaster struck it seemed far outside their control.

Hostess Brands, maker of Twinkies and Ding Dongs, accounted for 24 percent of all those contributions to the multiemployer pension. It stopped making contributions in 2011 and then filed for bankruptcy in 2012, weighed down by weakened demand, rising competition, and large levels of debt. Federal courts allowed it to escape without paying the pension fund $1 billion in obligations.

The pension fund immediately went from being one of the healthiest in the country to one of the most at risk.

The pension was now in a category known as the “red zone,” which means if changes are not made it will likely become insolvent, and beneficiaries might just get pennies on the dollar when they retire. Some other pensions are even in worse shape.

“The crisis is looming on the horizon,” said Kenneth Feinberg, who worked at the Treasury Department until last year and was tasked with scrutinizing rescue proposals from multiemployer plans.

In February, as part of a new budget law, Congress created a commission to try to stabilize struggling pension funds. In the meantime, many existing companies like Just Born are on the hook to pay higher premiums. The Peeps-making company says, without providing hard numbers, that it pays 39 percent more in pension contributions than what it negotiated under its last union contract.

These are the contributions it tried to scale back when it tried to unilaterally make the change to divert new employees into a 401(k) plan. A federal judge last year said the company could not do this, but it appealed that decision. The company and its union – as well as many other firms – are waiting for the appellate court decision.

“We like to say that Just Born is the sweetest place in our community,” Ross Born, co-chief executive of the company and a grandson of its founder, said in a 2016 “year in review” video. “We use more sweeteners than anyplace around, and we have the sweetest people, who really care about our iconic brands.”

The sugary praise masked how strained relations had become with Just Born’s union workforce. The pension had already sued Just Born, and now the company, the pension, and the union are all tangled up in lawsuits. All sides are frozen as a federal appeals court decides whether Just Born can block new employees from the pension while avoiding the $60 million fee.

“You’ve gotten rid of the fund in a circular way that I don’t think anybody has ever done,” U.S. Circuit Court Judge James Wynn told Just Born’s lawyer in January, without saying whether he would allow it.

Since the strike, the company and its workforce have contracted. The union says there are only 326 workers on the production floors at Just Born now, down from 400 at the time of the strike. And just 250 are in the union.

Just Born’s Pye said the firm has no plans to sell itself or move overseas. The company is just trying to manage costs for the future. Union officials said they believe the company and its workforce have been changed forever.

“Will everybody look at things like they did before?” said Hank McKay, president of the union’s Local 6 chapter, which includes the Bethlehem workforce. “I don’t think so.”

http://www.philly.com/philly/busine...ght-threatens-u-s-pension-plans-20180329.html
 

TAEZZAR

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Unions served a great purpose 100 years ago with changing child labor abuse & poor working conditions.
Unions of today protect the lazy.
Also, if government is our great protector, why do we need unions for government workers ????
Unions are obsolete !
 

EO 11110

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this is all too common -- pension managers are bought by nyc vipers

The Lexington Herald-Ledger provided a detailed, well-reported update yesterday. Anyone with a strong interest in this case should read the article in full. Key points:

The Kentucky Retirement Systems Board of Trustees is debating whether to join a lawsuit that says the state’s pension agency was cheated on up to $1.5 billion in hedge fund investments by several wealthy corporations, with blame to be shared by some of its own current and former trustees and officials….​

“All of the actions discussed in the lawsuit happened before I joined the board and before most of the current members of the board joined,” [John] Farris [KRS board chairman ] said. “So we’re having to go back and recreate a time-line and decide what the board was doing when it invested in these funds. So far, we’re looking at 37,000 pages of documents.”…​

Among the 30 defendants named in the suit are the hedge fund dealers that sold investments to KRS and some of the nation’s wealthiest investors, including Henry Kravis, co-founder of KKR & Co., and Stephen Schwarzman, chairman and chief executive office of The Blackstone Group. The estimated net worth of just those two men is about $15 billion. The suit also targets KRS’ fiduciary and actuarial advisers….​

Focusing on those who allegedly had a direct hand at KRS in investment decisions, the suits’ defendants include current trustees William Cook and Vince Lang; former trustees Randy Overstreet, Timothy Longmeyer, Bobbie Henson, Thomas Elliott and Jennifer Elliott; former chief investment officers David Peden and T.J. Carlson, former executive director William Thielen; and former director of alternative investments Brent Aldridge.​

The suit also alleges certain conflicts of interest in the hedge fund deals.​
 

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http://www.kentucky.com/news/politics-government/article207302309.html

Frankfort
The Kentucky Retirement Systems Board of Trustees is debating whether to join a lawsuit that says the state’s pension agency was cheated on up to $1.5 billion in hedge fund investments by several wealthy corporations, with blame to be shared by some of its own current and former trustees and officials.

At stake is whether KRS can recover part of its estimated $27 billion pension shortfall from out-of-state billionaires rather than the state budget, which is being bled dry for pensions at the expense of schools, social services and other programs. KRS is responsible for providing pensions to about 365,000 past and present employees of state and local governments.

“There are only two known ways for KRS to avert the imminent collapse of its plans: a massive taxpayer bailout and/or the success of this lawsuit,” attorneys for plaintiffs in the case wrote in a court filing earlier this month.

A special subcommittee of the KRS board met in closed session Tuesday to discuss the suit.

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“We have not yet made a decision,” said John Farris, KRS board chairman and president of Commonwealth Economics in Lexington.

“All of the actions discussed in the lawsuit happened before I joined the board and before most of the current members of the board joined,” Farris said. “So we’re having to go back and recreate a time-line and decide what the board was doing when it invested in these funds. So far, we’re looking at 37,000 pages of documents.”

The suit was filed Dec. 27 in Franklin Circuit Court by eight public employees whose pensions are held by KRS, organized by Michelle Ciccarelli Lerach, an experienced financial class-action litigator in San Diego. The plaintiffs — including a circuit court judge in Clark and Madison counties, a former assistant Jefferson County attorney and a retired Kentucky State Police captain — say they seek damages on behalf of public employees and state taxpayers.

The suit alleges that, starting in 2011, KKR & Co., Prisma Capital Partners, The Blackstone Group and Pacific Alternative Asset Management sold KRS hedge fund investments that were “extremely high-risk, secretive, opaque, high-fee and illiquid vehicles.” The hedge funds produced “excessive fees … poor returns and ultimately losses,” saddling Kentucky with a crippling debt that should be repaid by the hedge fund dealers and their owners, the suit alleges.

The “impenetrable spider web of fees” charged by the hedge fund dealers were impossible for any outsider to calculate, and deliberately so, the suit alleges. It cites a 2015 report from the nonprofit Roosevelt Institute in Hyde Park, N.Y., that found public pension systems pay an estimated 57 cents in fees to hedge fund managers for every dollar in net return.

And a report prepared for KRS by CEM Benchmarking found that its actual investment costs in 2014 were $126.6 million, or more than 100 percent higher than the $62.4 million it had publicly disclosed, the suit alleges. Most of this money was fees paid to investment managers.

The “hedge fund sellers … knew if the true nature and risks of these high-risk/high-fee vehicles were disclosed in the KRS annual reports, an uproar would have resulted and the unsuitable ‘investments’ could have been terminated, costing the hedge fund sellers millions and millions of dollars a year in fees. Hedge fund sellers let the deception continue because it served their selfish economic purposes,” the suit alleges.

Among the 30 defendants named in the suit are the hedge fund dealers that sold investments to KRS and some of the nation’s wealthiest investors, including Henry Kravis, co-founder of KKR & Co., and Stephen Schwarzman, chairman and chief executive office of The Blackstone Group. The estimated net worth of just those two men is about $15 billion. The suit also targets KRS’ fiduciary and actuarial advisers.

Meanwhile, the suit alleges, KRS trustees and officials with no expertise in complicated financial matters dithered as the pension system turned the $2 billion surplus it enjoyed in 2000 into its current state of near-insolvency. The largest pension fund for state workers today has just 13 percent of the money it’s expected to need to pay future benefits. The largest pension fund for local government employees is 53 percent funded.

For years, KRS knowingly kept in place an unrealistically optimistic set of assumptions about investment returns, government payroll growth and inflation that made the pension funds’ numbers look better than they should have, the suit alleges. And as the pension system lost billions of dollars during one of the greatest extended bull markets in the nation’s history, KRS trustees and officials made desperate bets on hedge funds while they claimed in public statements that they were being cautious with taxpayers’ money, the suit alleges.

“Trustees, with the knowing assistance of all the other defendants, chose to cover up the true extent of the KRS financial/actuarial shortfalls and take longshot imprudent risks with KRS funds to try to catch up for the funds’ prior losses and deceptions,” the suit alleges. “They misled, misrepresented and obfuscated the true state of affairs inside KRS from at least 2009 forward.”

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Focusing on those who allegedly had a direct hand at KRS in investment decisions, the suits’ defendants include current trustees William Cook and Vince Lang; former trustees Randy Overstreet, Timothy Longmeyer, Bobbie Henson, Thomas Elliott and Jennifer Elliott; former chief investment officers David Peden and T.J. Carlson, former executive director William Thielen; and former director of alternative investments Brent Aldridge.

The suit also alleges certain conflicts of interest in the hedge fund deals.

For example, Cook, who was appointed to the KRS board by Gov. Matt Bevin in June 2016, retired a year earlier as a senior portfolio manager at Prisma and continued to have a financial interest in the company and a “close personal” friendship with Prisma CEO Girish Reddy, the suit alleges.

While Cook was still at Prisma, the company created and sold the Daniel Boone Fund as an investment for KRS, the suit alleges. As the $500 million fund started to lose money, Cook and others helped arrange for a Prisma executive to work inside the KRS offices in Frankfort for two weeks every month, helping with the system’s investment portfolio, the suit alleges. In 2016, even as KRS began to pull out of other hedge funds, citing their weak performances, it put an additional $300 million into Prisma’s Daniel Boone Fund, the suit alleges.

KRS’ chief investment officer at the time was Peden, who worked at Prisma himself a decade earlier, the suit alleges. The suit quotes Peden as telling interviewers that bringing the Prisma executive into the KRS offices was “like having a free staff member.” Peden said Prisma offered KRS the use of its executive when it learned the pension system could not find a qualified candidate to help with its hedge fund investments, the suit alleges.

Neither Cook nor Peden returned calls seeking comment this week. Cook is still on the KRS Board of Trustees and serves on its investment committee, according to the KRS website.

The defendants have filed individual responses to the lawsuit denying wrongdoing and asking Judge Phillip Shepherd to dismiss the case. Among their defenses, the hedge fund dealers say the plaintiffs have shown no evidence that they misrepresented their products or committed any other bad acts. Current and former KRS trustees and officials cite sovereign immunity, the legal shield that generally covers people working in public service.

In his response, Cook called the conflict of interest allegations against him “without merit on their face.” Cook said he has recused himself from every KRS board decision involving Prisma because of his past employment at the company. He said he also recuses himself from any business involving KKR, which acquired Prisma in 2012. And when KRS made the decision in 2016 to invest an additional $300 million in Prisma’s Daniel Boone Fund, Cook said that was after he retired from Prisma and before he joined the KRS board, so he had no role in the deal from either end.

Read more here: http://www.kentucky.com/news/politics-government/article207302309.html#storylink=cpy
 

Aurumag

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When the pensions are no longer funded, we will be post SHTF.

Until then, the .gov stooges and their bankster buddies will continue kicking the can full of ethereal FRNs further down the road towards the bottom-less pit.

We are talking about Democrats predominantly...
 

brosil

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Given the insolvency of the pension fund, I wouldn't want to be in it as a new worker. Even a 401k would be a better deal.
 

Unca Walt

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This is simply a case of "Big Picture/Little Picture" -- where BOTH pictures clearly show they "ain't got the fargin money".

Fantasy rates of return on (unsustainable) retirement bennies at the individual company investments linked with the fantasy (unsustainable) rates at the group-company investments level.

So if you dodge out of the loop, then the gummint steps in and says: "Gimme sixty million!"

There is no bumper-sticker answer at this point. The bumper-sticker answer should have been posted on the front door of every company forty years ago:

"Retirement benefits for anyone are limited to using only realistic numbers. Pie-in-the-sky huge retirement salaries based on impossible ROI's from companies' retirement funds are never, ever, EVER going to work."
 

TAEZZAR

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Even a 401k would be a better deal.
I never joined the "club" & look how it is being treated today. I have wondered, for years, what we would have if EVERYONE (workers, city, county, state, fed & CONgress) was on one system.
Where would "they" get the money for the illegals & the others that don't pay into it.
Because "they" surely don't dip into their own pockets, do they ???
 

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The Government Employee Pension situation in Kentucky has been a matter of public record for years. Over a decade ago the Democrats who controlled the legislature stopped fully funding it. All attempts to fix it have been fought tooth and nail by the Democrats and the Teachers en masse. Pile onto this the recently revealed looting of the pension money by cronies of the Wall Street Pirates in StateGov.
The situation is arithmetically unsustainable, period. The new Governor has attempted to address the issue since taking office, as a priority. He has cut other government spending to divert those funds to shore up the pension system, while at the same time attempting to get some form of reform in place. However, the other side does not want to hear anything but "no change" except perhaps "more money for teachers and education".

Most teachers in Kentucky are not covered by social security. I used to look with envy on them [Those who do not pay Social Security]. But there is, of course, a catch. States and cities do not and cannot print money. When the system collapses or goes bankrupt, there is no "last resort" of printing money. They can lose it all.

If they worked together, perhaps the system could be saved. I don't think it will be.
 

gringott

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I never joined the "club" & look how it is being treated today. I have wondered, for years, what we would have if EVERYONE (workers, city, county, state, fed & CONgress) was on one system.
Where would "they" get the money for the illegals & the others that don't pay into it.
Because "they" surely don't dip into their own pockets, do they ???
There was not and never will be such a situation because the FedGov is not that stupid. They must keep themselves in power, therefore, pensions of the FedGov are backed by money-printing.
All the other pensions you mentioned are not, meaning they can and will be renigged on. Mark my words.
Failure of State and Local pensions makes the FedGov more powerful, not less.
 

TAEZZAR

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Here in Orygun, we have many retires of the "state" getting 20k to 50k/ MONTH !!!!! Yes, some retired from the state over $500K a year !!!!!!!

This is criminal !!
Oregon PERS.jpg
 

gringott

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We have a situation here in Kentucky that I have observed for years. A new superintendent of schools is needed for the district. A high priced out of state academic is recruited, at an enormous pay and benefit scale. They move here, and as soon as they qualify they retire and move on to Florida. It seems to take from 2 to 4 years. It has happened over and over.

It is a racket.
 

TAEZZAR

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We have a situation here in Kentucky that I have observed for years. A new superintendent of schools is needed for the district. A high priced out of state academic is recruited, at an enormous pay and benefit scale. They move here, and as soon as they qualify they retire and move on to Florida. It seems to take from 2 to 4 years. It has happened over and over.

It is a racket.
That is the typical, unethical, behavior of "public servants". It is immoral, but accepted by the system so that others can do it too !
 

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A high priced out of state academic is recruited, at an enormous pay and benefit scale.
And they always hire someone from elsewhere because they think “new ideas” will fix their sorry schools...
 

Joe King

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Here in Orygun, we have many retires of the "state" getting 20k to 50k/ MONTH !!!!! Yes, some retired from the state over $500K a year !!!!!!!
They learned how to use the rules to maximize their own benefits.

Reminds me of a time a few years ago when I was having lunch with an out of work friend. Next to us was a table with a bunch of city employees. The one older guy (a sloppy-fat f' that looked as though he hadn't done a days worth of real work in years) was just going on and on telling how he was going to retire the following year with all these bennys and pension that was going to be more than his current yearly salary. He was explaining to them how to do it.

It was all I could do to not tell 'em what I thought about it. It's a bunch of bs
 

TAEZZAR

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They learned how to use the rules to maximize their own benefits.

Reminds me of a time a few years ago when I was having lunch with an out of work friend. Next to us was a table with a bunch of city employees. The one older guy (a sloppy-fat f' that looked as though he hadn't done a days worth of real work in years) was just going on and on telling how he was going to retire the following year with all these bennys and pension that was going to be more than his current yearly salary. He was explaining to them how to do it.

It was all I could do to not tell 'em what I thought about it. It's a bunch of bs
A friend's BIL just retired from the city, as a road worker, at OVER $6K a month. I'll bet you that he didn't make that much on the job !!!
 

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Here in Orygun, we have many retires of the "state" getting 20k to 50k/ MONTH !!!!! Yes, some retired from the state over $500K a year !!!!!!!

This is criminal !! View attachment 101797
That should be published in every news paper as actual reporting along with their addresses. That is news people are really interested in.
 

gringott

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Tomorrow starts spring break and the teachers are going to Frankfort to protest. Somehow I doubt there will be more than a couple of hundred.
 

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So think a bit about this: the system is unfunded to tens of billions of dollars.
When you look deeper the people of their own party, the democrats, years ago seen a Golden Egg in the Teachers' retirement fund, and at the time the booming equities markets. The democrats "borrowed" a chunk of the money AND failed to fund the portion they were obligated to do for a few years.

The stock market tanked, Most of those old jackasses (Dems that did this) are gone now and expect the current state reps and senate to clean up the mess without mentioning "WHO did this ?"

I'm not saying IF those things had not occurred things would be O.K. today.
I am saying the current condition would be far more manageable and less drastic than the PLAN passed into law.

These "Educated Useful Idiots" got played by their own masters.

OBTW - THESE PART_TIME, Seasonal Representatives & Senators NEVER touched their own pension plan ( PART-Time AND Seasonal PENSION PLAN - WTF?)
 

gringott

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Why can't the Fed simply create enough fiat to fund every pension government ?
Because the inflation would make Zimbabwe look like a piker.
 

GOLDBRIX

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Why can't the Fed simply create enough fiat to fund every pension government ?
TAKE this photo, imagine those being U.S. Federal Reserve Notes AND you need all that to buy ONE LOAF of BREAD:


That's why.