Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Retirement

The PBGC is Falling. Where is Superman When He is Needed?

This article was published by The McAlvany Intelligence Advisor on Friday, March 3, 2017:

In the 1978 film Superman, Lois Lane is caught mid-air by Superman who says: “Easy, miss. I’ve got you.” Responds Lois: “You – you’ve got me? Who’s got you?

Concerning government agencies making promises, the answer is always and everlastingly: the U.S. taxpayer.

For example, consider the 42-year-old government agency backing up single-employer and multi-employer pension plans:

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Federal Insurance Agency Backing Union Pensions Facing Crisis Itself

This article appeared online at TheNewAmerican.com on Thursday, March 2, 2017: 

Logo of the United States Pension Benefit Guar...

When Teamsters Local 707’s pension plan ran out of money in February, it sought assistance from the federal Pension Benefit Guaranty Corporation. Said PBGC Director Tom Reeder:

This is a big issue for us. It’s a big issue for Local 707 and it’s a big issue for others in the same situation across the country.

 

We’re projected to run out of money in eight to 10 years. Many union pension plans are projected to run out in 20 years.

The federal insurance agency is now paying out $1.7 million every month to the stranded retirees of Local 707.

707’s problems have been decades in the making.

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Dallas Pension Plan Solution: Everyone Shares the Pain

This article appeared online at TheNewAmerican.com on Wednesday, February 22, 2017: 

Downtown Dallas in the background with the Tri...

Downtown Dallas in the background with the Trinity River in the foreground.

Following the pension plan board meeting on Monday, Presidents’ Day, a decision was made to accept the rough outlines of a proposal by Texas House Pensions Committee Chairman Dan Flynn to keep the Dallas police and firefighters pension plan from going bankrupt. Said city council member Philip Kingston, “Flynn’s [plan] is the best of the bad options.”

Everyone involved will share the pain: some by having their benefits cut back, and some by having the contributions increased.

Under the Summary issued late Monday night:

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Trump Pick for Management & Budget Talks Raising Retirement Age

This article appeared online at TheNewAmerican.com on Wednesday, January 25, 2017:

Representative Mick Mulvaney (R-S.C., shown), President Donald Trump’s pick to head up the Office of Management and Budget (OMB), touched the famous “third rail” of American politics during his confirmation hearing on Tuesday. Testifying before the Senate Budget Committee, Mulvaney was pressed hard for his views on Social Security by Senator Lindsay Graham (R-S.C.): “Do you think we need to look at adjusting the [retirement] age yet again because we live longer?”

Replied Mulvaney, “I do, yes sir.”

His response was unsettling to Senator Debbie Stabenow (D-Mich.), who declared,

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Teamsters’ Pension Plans Seek Massive Cuts to Retirees to Stay Solvent

This article appeared online at TheNewAmerican.com on Monday, January 2, 2017:

Logo of the United States Pension Benefit Guar...

The Central States Teamsters pension plan, covering more than 400,000 participants, expects to receive permission shortly from the Treasury Department to cut benefits to those participants, possibly by as much as 30 percent. At the end of 2014 the plan had $35 billion in liabilities (future promises to participants as they retire) compared to less than $18 billion on hand to pay them.

Right behind Central States was the New York State Teamsters Conference Pension and Retirement Fund, which is also in trouble. Owing nearly $3 billion to its 35,000 plan participants, it has less than $1.3 billion to meet this obligation. Its plan, in its request to the Treasury Department, spelled out just how great the cuts would be:

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Large Pension Plans Adjusting Their Targets Downward

This article appeared online at TheNewAmerican.com on Wednesday, December 21, 2016:  

English: Jerry Brown's official picture as Att...

California Governor Jerry Brown

Heading into negotiations this past weekend between the California governor’s office, teachers’ unions, and pension plan trustees managing the California Public Employees’ Retirement System (CalPERS), Governor Jerry Brown spoke the truth: “There’s no doubt CalPERS needs to start aligning its rate of return expectations with reality.”

Coming out of the meeting, the gap between the plan’s target rate of return and reality remained immense.

The last time CalPERS faced reality and flinched was in 2012 when

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Boomers Are Retiring, Draining Pension Plans

This article appeared online at TheNewAmerican.com on Monday, December 12, 2016:

Roosevelt Signs The : President Roosevelt sign...

President Roosevelt signs Social Security Act, at approximately 3:30 pm EST on 14 August 1935.

In a moment of surprising candor, Danielle DiMartino Booth, a former advisor to the Federal Reserve, said in a Real Vision TV interview on Saturday that “the Baby Boomers are no longer an actuarial theory. They’re a reality. The checks [from their retirement plans] are being written.”

For years commentators have repeatedly asserted that “when” the Baby Boomers (that generation born between 1946 and 1964) start to retire, they will start using up funds set aside in pension plans, putting those plans into crisis. According to Booth, that day has arrived.

She pointed to the crisis in Dallas that threatens to put the city into bankruptcy, and the report from Calpers (the California Public Employees Retirement System),

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There is No “Permanent” Fix for Social Security

This article was published by The McAlvany Intelligence Advisor on Monday, December 12, 2016: 

Social Security Poster: old man

Social Security Poster:

There’s no doubt that Texas Representative Sam Johnson means well. He and his constituents are concerned about their financial futures and about the viability of Social Security as an important part of those futures. So on Thursday he offered his plan “to permanently save Social Security.” He calls it the “Social Security Reform Act.”

The plan doesn’t deserve a close look.

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UPDATE: Dallas Pension Plan Stops Early Withdrawals

This article appeared online at TheNewAmerican.com on Friday, December 9, 2016:

English: Flag of Dallas, Texas Esperanto: Flag...

On November 21, The New American published an article entitled “Dallas to Declare Bankruptcy?” suggesting that the Dallas Police and Fire Pension System was in such poor shape that Dallas was looking more and more like Detroit.

It was pointed out that Moody’s declared that Dallas has higher unfunded pension liabilities, relative to its balance sheet, than any major American city except Detroit. The article noted that the plans’ present troubles dated back to a 1993 decision to offer a “retention perk” to keep officers considering retirement to stay on for a few more years.

That “perk,” referred to as DROP  — Deferred Retirement Option Plan — allowed those agreeing to stay on to

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Texas Congressman Proposes “Permanent” Fix for Social Security

This article appeared online at TheNewAmerican.com on Saturday, December 10, 2016:  

Congressman Sam Johnson (R-Texas), chairman of the House Ways and Means Social Security subcommittee, presented his plan, the “Social Security Reform Act,” on Thursday, which he called “a plan to permanently save Social Security.”

His proposal involves the same solutions often proposed by others trying to keep Social Security from going broke: cutting benefits, raising the retirement age, adding “means” testing, and cutting or eliminating altogether the COLA — Cost of Living Adjustment.

According to Michael Linden, an associate director at the liberal Center for American Progress, the cuts to benefits would be severe — between 11 percent and 35 percent — and they would include those already receiving Social Security benefits. Social Security actuaries who analyzed Johnson’s plan (at his request) came up with different numbers: Cuts would range from 17 percent to 43 percent but over a longer time period and with the same conclusion: everyone in Social Security (with the exception of the lowest-income participants) would take a hit under Johnson’s plan.

Nowhere in Johnson’s plan is any mention of privatizing the program, which is surprising, as it was a topic of discussion during the Republican presidential debates. Rand Paul, Mike Huckabee, Rick Perry, and Ted Cruz all expressed their support for privatizing Social Security as the best way to solve its myriad problems.

Here are some of those problems:

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Trump’s Plans to Cut Government Coming Into Focus

This article appeared online at TheNewAmerican.com on Wednesday, December 7, 2016:  

English: , member of the

With the help of Representative Jason Chaffetz (R-Utah – shown)), the chairman of the House Oversight and Government Reform Committee, President-elect Donald Trump is narrowing his focus on just how, starting on his first day in office, he plans to start cutting government.

Trump made many promises on the campaign trail, many of them glittering generalities:

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Illinois Governor Vetoes Chicago Bailout Bill

This article appeared online at TheNewAmerican.com on Monday, December 5, 2016:  

English: Source: http://www.chicagob2b.net/lin...

Illinois Governor Bruce Rauner vetoed a bill on December 1 that would have provided a $215 million bailout of the Chicago public schools. So certain were school officials that he would sign it — allowing them to make a past-due payment to the Chicago Teachers’ Pension Fund — that they made it a part of their budget for next year.

The original bill passed by Democrat supermajorities in both houses was for $700 million, but during negotiations Rauner, a Republican, agreed to $215 million instead, in exchange for a promise that the Democrats would institute real pension reform. Once the bill hit Rauner’s desk, however, all deals were off: Give us the money, said the Democrats, and forget pension reform.

Rauner’s veto message is instructive in several regards.

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Chicago Dreaming

This article was published by The McAlvany Intelligence Advisor on Monday, December 5, 2016:  

Chicago Public School Officials were so sure that they would get another bailout from the state that they actually put it into next years budget. The city is behind on making a $730 million pension payment due its teachers pension plan, and the $215 million they were expecting from the state would allow them to make it.

The bill that passed the state senate unanimously and the house overwhelmingly was headed for Governor Bruce Rauners desk for signing until Rauner (pictured) learned that the Democratic leadership had no intention of keeping their promise to institute significant pension reform in order to get the bailout.

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The Tax Foundation’s Big Surprise: Trump’s Tax Plan is Better Than Hillary’s!

This article was published by The McAlvany Intelligence Advisor on Friday, October 21, 2016:  

English: The standard Laffer Curve

The standard Laffer Curve

The Tax Foundation, founded nearly 80 years ago, considers itself non-partisan, guided by what it calls “the principles of sound tax policy, simplicity, transparency, neutrality, stability, no retroactivity, broad [tax] bases and low [tax] rates.” It has steadfastly opposed tax increases of any kind: income, corporate, or excise. Especially annoying are tax “preferences” (i.e., subsidies) for the housing industry and tax credits for certain constituencies (which the Foundation calls “picking winners and losers”).

So it’s no surprise that in its study of Trump’s and Clinton’s so-called “tax plans” the Foundation concluded that Trump’s was vastly superior to Hillary’s:

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Social Security to Announce Tiny Increase in Benefits for Next Year

This article appeared online at TheNewAmerican.com on Tuesday, October 11, 2016:  

Seal of the United States Social Security Admi...

Next Tuesday the Bureau of Labor Statistics (BLS) will announce Social Security’s COLA (Cost of Living Adjustment) for 2017. It is widely anticipated to be between nothing and $3 a month for the average beneficiary.

But Medicare premiums (retirees are often expected to pay a monthly fee for coverage) for seniors receiving Social Security retirement benefits are expected to jump nearly $30 a month. That premium increase would reduce the average retirement benefit by about $25 a month, except that Congress had inserted a “hold harmless” provision into Medicare law. Instead, the premium increase will be funded by Medicare, thereby hastening the day when that part of Social Security runs out of money.

The statistics reflective of the current gradual liquidation of Social Security’s so-called Trust Fund are familiar to most recipients:

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California’s Pension Plans Report Dismal Results, Increasing Shortfalls

This article appeared online at TheNewAmerican.com on Wednesday, July 20, 2016:  

Ted Eliopoulos, the chief investment officer of the country’s largest pension plan, the California Public Employees Retirement System (CalPERS), did the best he could with the bad news: “Positive performance in a year of turbulent financial markets is an accomplishment that we are proud of.” That “positive performance” was a measly 0.61-percent return from July 1, 2015 through June 30, 2016, on his $300 billion pension plan. That means that the fund is now about $100 billion short of meeting its future obligations.

But that $100 billion number greatly understates the real liability because it’s based on a pixie-dust assumption that the plan can earn an average

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Puerto Rico Bailout Deceptively Called “Restructuring”

This article appeared online at TheNewAmerican.com on Friday, May 20, 2016:  

Corcho Beach in Vieques island, Puerto Rico.

Corcho Beach in Vieques island, Puerto Rico.

Hidden behind the tentative agreement announced by House Speaker Paul Ryan on Thursday that would allow Puerto Rico some breathing room over its massive $73-billion national debt are the bailouts that are already in place.

The agreement is based on the bill by Rep. Rob Bishop (R-Utah) that creates another government bureaucracy to oversee the orderly “restructuring” (read: massive haircut for PR’s bondholders). When he presented his bill, Bishop said it would “give Puerto Rico access to a court-enforced debt restructuring in exchange for the imposition of a federal fiscal oversight board.”

Ryan said the agreement would allow the island territory to

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Puerto Rico Stiffs Bond Investors on Monday

This article was published by The McAlvany Intelligence Advisor on Monday, January 4, 2015:  

Coat of Arms of Puertor Rico

Coat of Arms of Puertor Rico

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Social Security Defaults Again on Its Promises: No COLA for 2016

This article appeared online at TheNewAmerican.com on Monday, October 19, 2015:  

Social Security Poster: old man

On Thursday the Social Security Administration announced that for the third time in six years there will be no COLA (Cost Of Living Adjustment) to beneficiaries’ checks next year. There was no COLA in 2010 or 2011, thanks to the government index used to determine whether an “adjustment” (increase) was justified, to offset inflation. This year’s culprit was the price of gasoline, which fell 23 percent, wiping out any chance for an increase in the checks going to more than 60 million recipients.

Heroic and often invisible measures have been undertaken in recent years to cover up the program’s insolvency:

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Want a Raise? Work for the Government

This article appeared online at TheNewAmerican.com on Friday, October 9, 2015:  

It used to be that the way to get ahead was to work harder, work smarter, find your passion (à la Tony Robbins), marry the boss’s daughter, or be the boss’s daughter (or son). But, according to the latest study from the Cato Institute, the best way is to “sell your soul to the company store” (apologies, Johnny Cash): Work for the government. Preferably, the federal government.

Since the 1990s, federal government employees have enjoyed greater increases in salary growth than those in the private sector, with federal workers in 2014 earning 78 percent more, according to the latest report from Cato, entitled “Downsizing the Federal Government.”

In 2014, based on numbers provided by the U.S. Bureau of Economic Analysis (BEA), the average federal worker in 2014 made

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.