<p>"If you read the charts in the attachment the pension problem was created by States not meeting their required contributions. In NJ 1.86% of all revenue goes to pension costs. If they just made the contributions required the problem would be minimal or not exist at all.</p>
<p>In N J pensions are now maxed out at the social security max income- $106,000 or so. We still have one of the biggest problems and it is solely because the contributions were not made for years."</p>
<p>This is ridiculous. I would be mad if the state didn’t make contributions they were supposed to make.</p>
<p>Just to add another layer to this discussion…those who’ve argued the wealthy Californians may indeed leave in mass exodus in favor of states like TX, FL, WY, or one of the other few without a state income tax, you may want to reserve speculation. Apparently, many in CA don’t feel it’s “fair” that these individuals should simply be allowed to leave so easily with their money. Yes, they’ve already paid taxes during their residence as Californians, but let’s force them to pay yet again if they choose to “exit”:</p>
<p>It’s interesting. Paul McCulley was one of the leaders of Pimco. You know, the bond company. I guess the company that runs over a trillion dollars was run by a commie. </p>
<p>Supposedly Paul is worth $50 million. He was against austerity when the financial crisis hit. He has long hair. He rides a motorcycle if
I am not mistaken. But it seems to be very difficult to find actual facts that McCulley pushed this exit tax.</p>
<p>Not that facts matter. Beliefs, no matter how stupid, matter more. Who needs facts?</p>
<p>Anyway, where is that several year old proposition?</p>
<p>So NJ should just tell the public union employees to forget their pensions? The govt didn’t fund them, after agreeing to fund them. Sorry, you’re out.</p>
<p>It does happen in the private sector. They simply decide a fine morning that they are no longer continuing pension plans. What is in there is yours but thats it.</p>
<p>“n 1999, IBM jettisoned its traditional pension plan in favor of a cash-balance plan. Pension amounts were frozen in place, with all future benefits coming in the form of a cash credit. Many employees – especially older workers who had been with IBM for more than a decade — lost tens of thousands of dollars in future retirement benefits in the switch.”</p>
<p>And it is despicable, unethical behavior. Is it OK to lie if you have enough money and power? It’s OK not to live up to one’s promises if you just decide you shouldn’t have made that promise?</p>
<p>“Well, gee, I was going to pay you next month for this TV I bought today, but y’know, I don’t think I want to pay that anymore. Sorry VISA, but my promise to pay you is no longer valid.”</p>
<p>"“n 1999, IBM jettisoned its traditional pension plan in favor of a cash-balance plan. Pension amounts were frozen in place, with all future benefits coming in the form of a cash credit. Many employees especially older workers who had been with IBM for more than a decade lost tens of thousands of dollars in future retirement benefits in the switch.”</p>
<p>It is a common occurrence in private sector. Most big firms are doing away with pensions. I think the ones that still do are oil companies but there may be other sectors. </p>
<p>Why should public sector be protected? If they don’t have money, they should come out and declare it openly and be honest. At least the employees will look for other jobs that pay more.</p>
<p>I think pensions need to be redone in Cal. New employees are getting new deals and the new deals aren’t as lucrative. So way out in the future, California will have less of a pension problem. </p>
<p>Double dipping should be eliminated. The way pensions are calculated should be redone. Add more years of income to figure out pensions and this should reduce costs.</p>
<p>Stockton should cut their pensions. Calpers, which represents workers that are going to receive pensions, is fighting for the people they represent.</p>
<p>What do you when the govt did have the money and didn’t fund the pensions? Then later, the govt cuts taxes and says, “Oops. Sorry. We don’t have the revenues to pay your pensions.”</p>
<p>Of course, all of the retirees who lost their promised pensions (whether from the public or private sector) will now cling even more tightly to their Social Security and Medicare entitlements, regardless of how much they contribute to government budget deficits or force higher payroll taxes.</p>
<p>That’s great that retirees now can cling to their Social Security and Medicare entitlements. There will only be IOU’s left when our generation retires :(</p>
<p>I said before pensions should be redone in Cal…</p>
<p>But this doesn’t help…</p>
<p>"A study by the Pew Center for the States revealed that while the state’s plans are more than 80 percent funded, the state has failed to consistently make the required contributions, which created a funding decline from a $9 billion surplus in 2000 to a $53 billion unfunded liability in 2007.[5]</p>
<p>California covers only the current year’s cost of pension benefits, without setting aside funds to cover future obligations. As a result, the state’s total estimated liability grows each year and as of June 30, 2010, it totaled $59.9 billion, an increase of nearly $12 billion over the previous two-year period, the auditor said. [6]"</p>
<p>I saw a number that said there is a 3 (?) trillion dollar under funding of pensions nationwide in public sector (not sure if that is the number or if it is much larger). Several states are already suggesting that the federal government should step in and fill the gap.</p>
<p>These 3 trillion dollar numbers could be off. They are based on assumptions that may not occur.</p>
<p>The private sector also is underfunding their pensions. </p>
<p>The underfunding of pensions could become a very big problem for society as The baby boomers age.</p>
<p>Calpers is assuming they are going to make a 7.75 or is it 7.5 percent return on its investible assets. That might be a tough return to achieve.</p>