We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
And another reason the retirees should want their representatives at the negotiations to be different than those for the active employees.
According to this report, pension fund trustees allowed active employees to set up an additional annuity savings account that was separate from the defined benefit plan. Seems the annuity account paid interest rates above what the general marketplace offered and “Many times, pension trustees gave employees a “far greater” rate than what the fund earned on investments.” They paid rates as high as 7.5% of interest.
When the interest paid out the active employees exceeded the interest earned on investments, then the trustees apparently dipped into the funds that were supposed to be held in a trust account for the retirees. Over the last 5 years $532 million was shifted from the trust account to the active employee’s annuity account. This is known as commingling of funds and in the real world people would be going to jail.
No wonder the pension trustees think they are underfunded by $829 million – they gave away $532 million of that amount to the wrong people!
While the report says this is “effectively robbing” from the trust fund, IMHO there was nothing “effective” about it – this commingling of funds is downright stealing.
If I were a current retiree, then I would be asking for the pension fund trustees to get that money back from the active employees or take it from the trustee’s pockets.
Give Detroit retirees title to some of the unoccupied houses in the city.
Better still, require that the trustees live in houses in the city. I bet they currently don't.
For decades urban politicians have pandered to their base of public employees and public dependents by promising them that they'd be paid out of what they apparently viewed as a inexhaustible stream of taxation. Well, Maggie Thatcher was right about socialism - eventually you run out of other people's money. So all those years they bought those votes. And all those years the voters believed them and let themselves be bought. Fine. If you get what you pay for, you equally pay for what you get. They got it. Now let them pay for it. Ignorance, self-centered blindness and mendacity are no justification for taking money from people who had no representation in the voting bodies that made those choices. No taxation without representation!
The State of Illinois' public unions are up in arms because the General Assembly has voted to lower their benefits, raise the retirement age, etc. For years the General Assembly has not made the required payments into the system. Now the unions want taxes raised and the payments made to keep the benefits at the previous levels. They say "It's not our fault, we made our payments, the State didn't make it's payments."
True. But - why did they do that?
Because the politicans bought off the public unions for decades by funneling the money that should have gone into the pension funds into other leftist-favored programs instead. Did the unions point that out? Did the members vote them out and vote for GOP candidates instead? No. They voted for people who told them what they wanted to hear instead of for people who would do what needed to be done. So, sorry, no sympathy. I talked to one who said "I didn't know that!" It's been in the papers for years. It's not my fault you didn't know what was going on. It's yours.
The problem of the state not funding the retirement at the time the employee deposits are made is common. But understand that the legislators provide funds for those deposits in their budget and the decision not to deposit them is made by administrators. This is one of the biggest factors in underfunding of state retirements. The employees and unions have a good point because they had to make their deposits to the retirement system monthly. The state should be required to do the same.