State pensions...

[Bigmack]

With United dumping it's pensions and other companies just salivating to do the same, does anybody have any idea about state and local pensions?

Can states and municipalities bail on their pensions?

I researched enough to know that some states issued "warrants" during the Depression, and the banks cashed them, but discounted their value.

My sweet wife is just sure that our little state pensions - which actually look better and better, given the economy - are in jeopardy.

Any ideas?

[dsc]

1. It would be very hard for states to bail on pensions

I am not saying impossible but very hard. There are too many retired and current employees in most states for an elected government to survive doing that.

[SharonAnn]

2. I wouldn't be so sure they're safe. there's probably more than one

way to "restructure" them.

[snowbear]

3. State & Muni Pensions..

If you have an idiotic governor like we do, then yeah... state pensions can be tampered with. Same with the muni, (but that would start with your mayor and municipal assembly.)

Our current governor (I live in Alaska) is trying like hell to privatize the pensions of state employees. He doesn't have a lot of support with his senate though.

If he did wind up getting his way.. it would only affect new employees. Anyone hired beforehand would be off-limits.

Our governor BTW has the 2nd worst approval rating in the nation.. He's much, much worse than Gray Davis was when he was re-called..

[Historic NY]

4. NY Pension systems are very stable in fact they have regained some of the

loss suffered in the market some yrs back. Then it was on a boom and local municipalities which had to contribute were given reduced allotments or didn't have to pay at all. I filed my papers a couple of weeks ago and plan on collecting my first pension check next month.

[SoCalDem]

5. Jebbie kept on investing in Enron as it tumbled.. Teachers' pensions

I guess time will tell how much that smooth move hurt them..

[Bozita]

6. kick

[LittleWoman]

7. One way to cut a pension is to increase the cost of health insurance

The State Teachers Retirement System in Ohio used to provide health care coverage as part of the pension at no extra cost to the retiree and the coverage for a spouse was priced at a reasonable level. Now the retiree pays a health care premium and the spouse coverage is more expensive than that available from a private insurer. There are several reasons for this. The usual bad investments, which I do not think included rare coins which were part of the Workers Comp investments and are currently a big scandal, are part of the problem. Another part is some very bad spending habits on the part of the STRS Board including building a fancy new headquarters and paying bonuses to fund managers when the funds they managed suffered losses. Finally, they paid end of year bonuses to current retirees with money they should have set aside for future retirees. If your state/local pensions are exempt programs (that is you did not pay into Social Security) any Social Security you have coming from jobs which you may have had where you did make FICA payments will be subject to an offset and you will not get your full Social Security benefit. Thus, if you thought you could increase your retirement by working two jobs you are out of luck. These rules are complex and how they would be impacted by any of the current schemes posited by the White House is anybody's guess. The only thing that is for sure is that it will be bad news.

[dryan]

8. Florida Pension fund...

lost more money from the Enron bankruptcy than all the other states and municipal pension funds combined. The idiot that publically said "I love this stock!" knew that it was in trouble and encourged the State Pension Board to continue to buy Enron stock.

[Bozita]

9. Wasn't that fund run by a Jeb Bush appointee?

[dryan]

10. The former...

director was a Florida civil service employee. He was the man who testified against Enron during the hearings before Congress. The current director is Stepanovich -- his brother is a Republican operative.

[Bozita]

11. kick