Comments on: Is NEA Surfing Its Own Pension Tsunami?

By: Is NEA Surfing Its Own Pension Tsunami?

Is NEA Surfing Its Own Pension Tsunami? — Tue, 31 Jul 2012 14:10:31 +0000

[...] http://hotair.com/greenroom/archives/2012 [...]

By: Teachers Union Pension Problems Mount | Washington Free Beacon

Teachers Union Pension Problems Mount | Washington Free Beacon — Tue, 31 Jul 2012 13:57:03 +0000

[...] (NEA) faces “staggering” pension problems due to years of unchecked benefits for its members, according to Hot Air: The pension numbers are staggering, considering the number of employees/retirees involved must [...]

By: cthulhu

cthulhu — Tue, 31 Jul 2012 06:47:09 +0000

Defined benefit pensions suffer from a combination of human nature and harsh mathematics.

If a million people contribute a dollar per week for some lovely benefit five years in the future, and it occurs to one of them to worry about it, he’s going to worry $1 worth.

On the other hand, if someone is thinking of looting the plan, there will be $104M sitting there after just two years. You can spend a million dollars making the worrywart think everything is wonderful and still have a nine-figure take.

Which is why defined-benefit pensions should be as illegal as their closely-aligned brethren, Ponzi schemes.

By: RJL

RJL — Tue, 31 Jul 2012 03:43:00 +0000

As of January 1, 2011, NEA had accumulated $644.7 million in pension liabilities, for which it had $556.3 million available. For that fiscal year, the union contributed $25.2 million to the staff retirement plan. How much did they contribute to the Democrats?

By: Marcola

Marcola — Mon, 30 Jul 2012 23:46:54 +0000

Rules regarding pension promises:

1. Some promises will have to be broken, or
2. All promises will have to be broken to some degree, or
3. All promises will have to be completely broken, period.

When the remaining workers find supporting the retirees becomes too onerous, they will either ram changes through the current system (including courts), or the current system will collapse and another will be set up, or there will be no system. None of these alternatives bode well for retirees.

In other words, when there’s no more blood in the turnip, there will be no power on earth that will keep the checks coming and cashable… it’s only a matter of time.

By: teejk

teejk — Mon, 30 Jul 2012 23:31:17 +0000

education time! in case nobody with a real job didn’t notice, the old “defined benefit” plans are getting pretty rare. They require that you discount the projected payment stream until the last person is gone (projected liability), then forecast the projected earnings/inflows.

with investment returns in the single digits, the projected outflow (on a present value basis) is huge (a payout 20 years away at 10% is much less than that same payout at 5%).

And the projected return on assets is meager at best…double whammy

By: njcommuter

njcommuter — Mon, 30 Jul 2012 22:36:08 +0000

The disastrous investment climate can’t be helping either. Consider that a small but real silver lining