Cutting Pensions to Become Legal

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Current US law states that pension plans can save money by cutting benefits to future retirees, but not to people who are already retired. Congress is now voting on legislation which would allow the pensions of people already retired to be cut, even drastically. Here is the news article:

http://money.cnn.com/2014/12/12/retirement/pension-cuts/index.html?hpt=hp_t1

Please comment.

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Type: Question • Score: 10 • Views: 2,004 • Replies: 17

@Brandon9000,

This sounds like a terrible idea. Isn't there some kind of contractual obligation for the plans to pay pensioners? This bill seems allow companies to renege on their obligations. But maybe I'm missing something.

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@Brandon9000,

There is no choice but to massively cut what has been promised, we dont have the money. The law is going to have to adapt.

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@hawkeye10,

hawkeye10 wrote:

There is no choice but to massively cut what has been promised, we dont have the money. The law is going to have to adapt.

And the people who worked hard all of their lives, are now helpless, and will become poor?

1 Reply

@Brandon9000,

Brandon9000 wrote:

hawkeye10 wrote:
There is no choice but to massively cut what has been promised, we dont have the money. The law is going to have to adapt.

And the people who worked hard all of their lives, are now helpless, and will become poor?

work hard, play by the rules, and get fucked.

Quote:

For millions and millions of Americans, the dream with which I grew up has been shattered. The ideal that if you work hard and play by the rules you'll be rewarded, you'll do a little better next year than you did last year, your kids will do better than you. But that idea has been devastated for millions of Americans.

How did this happen? I would argue it happened for two reasons. No. 1: We lost our economic leadership. Other nations began to do some things better than we do, and their economies started growing faster and faster as ours slowed down. Big, Simple Ideas

No. 2, and this is why I'm running for President: We elected people to high office who had the wrong response to the problem. And that's what this election is all about. Three or four big, simple ideas, even though the problems are complex.

http://www.nytimes.com/1992/04/26/us/the-1992-campaign-clinton-s-standard-campaign-speech-a-call-for-responsibility.html?src=pm&pagewanted=1

Bill Clinton 1992

20 years later some folks dont know how this works? Well, there is no cure for stupid.

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@Brandon9000,

Brandon9000 wrote:

Congress is now voting on legislation which would allow the pensions of people already retired to be cut...

For many individuals in or retired from positions in higher education or basic research, this plan has always been in effect. The pensions in these professions are for the most part tied to bond funds and the stock market. When stocks do well, the annual increase in annuity payments ( via the pension) increase. When the stock market does poorly, the annuity payments will fall. The bond funds ( in annuities ) remain fairly constant but at a low % yield.

Most individuals with these types of pensions ( annuities) position a % of their retirement money in bonds ( 50%?) and in stocks ( 50%).
Likewise, to safe guard for the future, many indivudals set up additional annuities ( on a tax-deferred basis) so that they have additional sources of retirement money ( if they need it ) as they age.

Remember, many Americans are living to 100+ today.

Thus, while working, an individual should continue to save ( funds outside his/her pension) and even after entering into retirement to have a safe financial future during retirement. Save and plan to live to at least 100 years of age.

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I'm sure Congress will make sharp cuts in their pensions and benefits to lead the way to prosperity. I think we have all had sharp reversals of fortunes from time to time. If it happens when you are thirty and healthy, you have the possibility of productive years ahead of you. If you are retired and in poor health, let's say about 70 - 80 years of age, you have a snowballs chance in hell of returning to your former career, you will be lucky to become a greeter at a Wall-mart. So, for the sake of the CEO's mammoth salaries and golden parachutes, you think it's fine to cut pensions and medical care to the people who laid the foundation before you? If that's your idea of restoring prosperity, that's exactly what you will be facing once you turn 45 or 50. It's going to be a shock after being a young, productive, hard-working, loyal employee when you realize suddenly within 6 months you will be considered too old to carry on.

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My personal opinion is that cutting the pension of someone already retired is highly immoral and should continue to be prohibited.

2 Replies

@Brandon9000,

Brandon9000 wrote:

My personal opinion is that cutting the pension of someone already retired is highly immoral and should continue to be prohibited.

When you get to the end of the month with 2408 in bills and 2185 in the bank saying " I promised to pay these people so I have to do it" is not going to change anything were the rubber meets the road. With the state of this economy workers are not going to be able to pay enough taxes to pay the pensions promised to government workers, and companies simply dont, they abandon the promises and turn to pension plans over to to the government.

1 Reply

@hawkeye10,

hawkeye10 wrote:

When you get to the end of the month with 2408 in bills and 2185 in the bank saying " I promised to pay these people so I have to do it" is not going to change anything were the rubber meets the road. With the state of this economy workers are not going to be able to pay enough taxes to pay the pensions promised to government workers, and companies simply dont, they abandon the promises and turn to pension plans over to to the government.

There is clearly enough money in the United States to pay for these commitments. The issue is not "workers are not going to be able to pay enough taxes", the issue is the government is not willing to tax them enough. In 2000, the government projected the national debt would be paid at current rates by 2013. Three major tax cuts and two wars later we are talking about cutting pensions because there is no other way. Want enough money? Rescind all the Bush era tax cuts. Don't want to go that far? Rescind all the Bush era tax cuts for those making $200k and above.

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first- great information. tax cut is a major concern.....

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@engineer,

http://www.wsj.com/articles/SB10001424127887323353204578127374039087636

Read this and remember that the bushtax cuts cost $3.3 trillion every ten years. The workers cant earn enough to pay current promises. The promises will not and can not be honored.

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@Brandon9000,

Brandon9000 wrote:

pension plans can save money by cutting benefits to future retirees...

If future retirees died prior to their actual time of retirement, the pension plans would be enriched with money. One solution to the pension problem is partially solved by increasing the retirement age to 70+. This however will increase the unemployment of younger workers entering the field and moreover, limit their ability to pay off their student loans.

We need more good jobs to soak up more tax from tax-paying employees. We also need to stop the import of foreign-born professionals who refuse to become US citizens. These folks want our jobs and our money, but they don't want US....

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All your working life, I tell you, "Keep working. I'll take care of you when you are too old to work anymore." Then, when you are too old to work anymore, I tell you, "Gosh, taking care of you turns out to be inconvenient, but good luck with your old age. Go eat out of garbage cans." To me, this sounds immoral.

1 Reply

@Brandon9000,

Quote:

My personal opinion is that cutting the pension of someone already retired is highly immoral and should continue to be prohibited.

Spot on!

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o agree so much on this.. pension plan should be in place. otherwise what will happen to the elder ones!

1 Reply

@Brandon9000,

Brandon9000 wrote:

... "Keep working. I'll take care of you when you are too old to work anymore."

Who said this? Provide a reference for this statement.

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@easterndebt,

easterndebt wrote:

... what will happen to the elder ones!

They'll be placed on the mighty, mighty welfare tit of this great nation. At some point in the future, at least 90% of the population ( at this rate) will be dependent on the welfare tit ( till it drys up...if it ever does!).

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Cutting Pensions to Become Legal

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