Longevity increases pension problems
To the consternation of government pension planners, Americans just keep living longer. AP reported:
NEW YORK (AP) — Americans are living longer than ever before, according to a new government report filled mostly with good news. U.S. life expectancy inched up again and death rates fell.
Rates also dropped or held steady for nearly all the leading causes of death.
But if people live longer, they take more in pensions. In the the private sector, that’s not a big deal. Almost all firms have switched to “defined contribution” plans, in which employees contribute to funds investing in private companies. If the retiree lives longer, his investments in the plan just keep paying dividends. If there’s a big recession and investment funds decline, then the retiree gets less — too bad, but at least nobody else is on the hook.
By contrast, most government employees still are on “defined benefit plans.” The funds are supposed to pay out large benefits no matter what happens to the investments of such funds as CalPERS and CalSTRS. If the investments tank during are recession, taxpayers are on the hook — at least theoretically.
Longevity comes in because, if defined-benefit retirees live longer than actuaries had anticipated, the pension fund has to pay out more. Unless investments rise much faster than anticipated — something unlikely — the taxpayers inevitably must pick up the extra payments.
Also slammed are tax-funded retiree health plans, which obviously will cost more if people live longer.
But also damaged financially will be Social Security and Medicare, which already are the major contributors to the federal government’s incredible $200 trillion (with a “t”) in unfunded liabilities, according to calculations by Boston University economist Laurence Kotlikoff. That’s more than $700,000 in debt the feds ran up for for each person in America; more than $2.8 million for a family of four.
It can’t last.
It’s why pension reform is inevitable. The longer it takes, the more pensioners will be hurt.
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John, thank you and I realize this is simply another reminder of the incredible hole we have dug ourselves. City, county, state and regional pension planners have little or no incentive to reform their plans as a “kick the can down the road” mentality has so permeated officials at all levels. Someone will float a bond or raise taxes and increase the unfunded debt again. A defined contribution plan is the answer to this out-of-control situation, but don’t hold your breath.
Oh, don’t fret about the longetivity problem in America. Let ObamaCare work it’s magic and watch the average age span nose dive! lol. Hell, we are still bringing in planeloads of potential Ebola infectees from West Africa and the borders are wide open. We just had our 1st Ebola transmission in Dallas. And the victim was wearing head to toe medical protective gear! What happens if some crazed ME terrorist infects himself with Ebola and sneaks across the porous Mexican border to infect as many Americans as possible? Do you have any idea of the exponential rate of viral transmission if, let’s say, 40 Americans got infected at any given time? At that point, how could you stop it? Order martial law and confine everyone to their homes? If Ebola catches fire in America the average lifespan will drop to 60 in a matter of a couple years! But keep watching CNN and Dr. Sandray Gupta. They will tell you that the virus cannot be transmitted by air and you are safe, even after the Dallas incident indicates otherwise!!! 😀
http://alltherightsnark.org/ebolabama/
Quite honestly, I don’t think I’d board a commercial aircraft these days without wearing one of those astronaut space suits and having my own oxygen supply to last for the duration of the flight. When you’re flying at 30,000 feet the air in your cabin is RECIRCULATED – meaning that you are breathing in other passenger’s contaminants. Sure, I’ve flown before and rolled the dice many times. But not with Ebola in the mix. For me, that’s a game changer after I read the news about the human to human transmission in Dallas. ObamaCare is risky enough. No way in hell am I taunting the Ebola virus. I feel so sorry for that poor young nurse in Dallas. She didn’t go to Africa and STILL got infected. If you want to play rooskie roulette and fly the friendly skies – good luck and God Bless!
Hey!
Nice to see you behaving yourself Collapso — I hope you learned something! Glad I could help !
You got Ebola and President Obama right! Classy!
Obola and Obama are interchangable for those of us in tune with current events, little boy. When you see Obama think Obola and when you see Obola think Obama. End of message. Nothing follows………….
Collapso? Are you 12? You HAVE to call the Nation’s first African American president “Obola”? You can’t call this Nobel Prize winning world leader “President Obama”? Do you refer to him using the name of a deadly disease which is a crisis in predominantly “black” Western Africa because you respect black people or because you find it funny or ironical? How could the deaths of thousands of humans ever be funny? Have you ever noticed that the professional writers on this blog NEVER make fun of the Presidents name in such a junior high school manner? They don’t like his policies and yet they have a civil veneer across their posts which reflects their educational levels and perhaps their cultural ethos of respect. When an adolescent writes often we don’t see these things. So I ask you— Are you 12? Or do you have deep seated feelings about race which you could explore? Defend yourself LITTLE BOY before your parents get home. –
Who said ebola was funny, Tedtard? I am only making a statement that ebola and Obola have things in common. Both are dangerous and reckless and damage people indiscriminately. You’re the one who constantly brings up race which is totally irrelevant and didn’t even enter my mind until you said it. If ebola originated in Iceland I would still call Obama ‘Obola’. We are allowed to do that in America. It’s called free expression. If you don’t like it – move. Obama is like a disease to America. Anybody with his eyes wide open can see that. Now move along, chump.
Well Collapso aka “little boy” if it’s ok to express oneself in America such as you do in your child like way then it’s ok for me– so—- “you” move. LMAO– you argue like an 11 year old. I would say 12 but you appear to be regressing little boy!
http://alltherightsnark.org/ebolabama/
Ebola fields forever. Hilarious. Thanks for the laughs, bob. Tedtard must be fit to be tied over that one! lol. Sorry I can’t take credit for it. 🙂
Like a child u can’t stop!
No class little buddy
Some person in a XXXL Purple Tee Shirt told me work union, live better and live longer!
Is he correct?
John–
Do you have ANY idea about America’s “unfunded” mortgage liability?
Oh my! We’re doooooooooooooomed!
I’m pushing 70 and talking to my bank about refinancing into another 30 year loan.
Wish me luck, and a long life.
Well said Douglas—- but if the doomer republi-baggers have their way the “age based” cleansing may get you first!!!
Doglass, your iving off the taxpayer collecting a pension and Medicare. With the taxpayers’ luck you’ll live another 70 years.
Bob o
Sounds like u made some poor career choices amigo!
I say super-duper congrats to all the retirees living longer!
Cal Pers 300 BILLION baby!
Moderation…your chances of getting a loan not good. Blue hairs get their lines of credit pulled regularily…..others have to learn to calm storms and walk on water carrying a well filled net of fish!
You poor thing!
He’s got a steady income stream. There should be no problem in getting a mortgage as long as he qualifies. The fact that he might not live another 30 years cannot be used against him.
I don’t buy it, that the fact that people are living longer just slipped up on the actuaries. That is what they do–CalPERS was always prepared for the baby boomers and longer life-spans is not news to them.
He’s got a steady income stream.
That the taxpayers can no longer afford.
You are stating an opinion that you can keep doing until the cows come home. You don’t own your own facts. Sixty-four cents of every dollar paid out comes from the investment earnings, not from the taxpayers–that is a fact. That he has a steady income stream is a fact. So go some place else to cry about how abused you are as a taxpayer.
Horse hockey! Even with rosey stock market assumptions CalPers is woefully under funded. And the stock market is starting to crater. Unfunded liabilities will strangle the system and the economy and you know it.
http://www.riabiz.com/a/5270811782938624/a-careful-look-into-whether-calpers-is-ticking-along-or-a-ticking-time-bomb
Too many old folks collecting govt checks and meds to keep them around. That $300 billion can be put to a better use after age based cleansing.
Desmond!
“aged based cleansing”!
LMAO
Best post of the month! Bully for you——-
IF LIC is 12, Desmond must be his 2 year-old brat. Both of their grandmothers would be proud!
I think/hope that Desmond was being facetious …….
Sad. These youngins should face the military draft…..give me 30 days helping Desmond and he would be a polite patriot with reverence for his elders. Eyes Right-
BUT Collapso is probably 12.
His vocab is advanced for twelve……an utter doomer prodigy, per se-
I wished him back……deplore doing this, but want to use my second of three wishes Genie…..
El Collapso….POOF!
he has a junior high, maybe high school vocab but emotionally he is….maybe…..12
sorry
I think life expectancy has leveled off and people are not living significantly longer. Just name one disease the medical industrial complex has cured in the last 50 years.
If anything I think life expectancy will drop. The healthcare system in this country is getting worse and that is going to accelerate with Obammiecare.
And lets face it, even though the economy has improved the last couple of years, it’s a house of cards just waiting to collapse. Debt is at record levels. We are lving in the creates credit bubble the world has ever seen. This can’t have a happy ending.
And when it does come crashing down what do you think that will do to life expectancy?
Let’s face it. With the economy and the huge amount of unfunded liabilities our rulers have ever reason to want most of us in an early grave.
polio
prostate cancer and several others if discovered earlythere are more—- medicine HAS advanced– no doubt about it doomer….
I always ask the anti pension doomers this question— what is the date at which you predict calpers, for instance< to go bk, or stop paying?
Sometimes they pick a date, which of course comes and goes and calpers after 100 years chugs on 300 Billion strong…..Zzzzzzzzzzzzzzzzzzzzzzz
doomers– I eat em for breakfast!
Depends on how long the Federal Reserve can keep the ponzi scheme going. Depends on how long the Red Chinese will keep loaning the US Gummit money. Depends on how long foreigners will have any faith in the US dollar. We are at the mercy of strangers. The US is the biggest creditor the world has ever known.
And BTW polio was cured over 50 years ago. And I know of a dude who died of prostate cancer last year.
Folks die all the time from Pca little buddy– but the stats are dramatically increased towards survival— one of many examples of medicine improving.
Still—– no prediction date on the fall of 300 billion dollar pension fund? Hmmmmm
“Folks die all the time…”
Now yer quotin’ OJ. Nice, Teddy.
Well Bob if oj said it, he said it but sadly while folks still die from pca it’s waaaaay improved. One of many advances in science and med….
Are you aware the British pound was the reserve currency in your lifetime? What happened when it changed to the dollar?
Desmond, these statist apologists don’t even know what a reserve currency is. You might as well be asking the question to your dog.
Oh yes I do Bobo!
Hey Bobo—- I bet you don’t even know the legal elements of a ponzi scheme??
Hurry– google it and repost!
Bob, Fido did not know, but thanks for the tip.