Monday, October 22, 2018

The Real Pension Problem

From The Intercept's coverage of the Illinois Governor's race:


Speaking of the Republican candidate, who is ignoring solutions to the pension problem in the state: “He doesn’t want to solve the problem because the pension is the battering ram he’s using to try and break the public unions,” Martire said. “He needs to keep spinning the pension problem because he needs the unfunded pension liability to make the case that it’s the public unions that are destroying things in every state.”

If you want more about pensions, generally, especially the reason that 70% of America's workforce used to have defined benefit pensions, but does not have them any more, recommended reading is Ellen Schultz's Retirement Heist. Executive summary: While defined benefit pensions are roughly twice as remunerative as defined contribution (IRA, 401K) plans, corporate America raided its pension plans to goose profits, stock prices and CEO compensation.  Public sector workers have  the few remaining defined benefit plans.

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