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  #11  
Old 10-31-2014, 08:26 AM
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Lane Meyers Lane Meyers is offline
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I haven't read all of the letters yet, but Cav Mac's letter is spot on, in my opinion.
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  #12  
Old 10-31-2014, 08:29 AM
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I haven't read all of the letters yet, but Cav Mac's letter is spot on, in my opinion.
I disagree with their introduction entirely.

Funding pensions now is not "freeing up funds" for the future. Fully funding pensions now is just not stealing from future generation productivity to pay for today. Any shortfall in pension funding is inter-generational theft from future generations.
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  #13  
Old 10-31-2014, 08:41 AM
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I disagree with their introduction entirely.

Funding pensions now is not "freeing up funds" for the future. Fully funding pensions now is just not stealing from future generation productivity to pay for today. Any shortfall in pension funding is inter-generational theft from future generations.
Po-tay-to, Po-tah-to, imo.

They choose to see the glass (or pension fund) as half-full. $#@%&! optimists.
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Old 10-31-2014, 08:47 AM
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I disagree with their introduction entirely.

Funding pensions now is not "freeing up funds" for the future. Fully funding pensions now is just not stealing from future generation productivity to pay for today. Any shortfall in pension funding is inter-generational theft from future generations.
Maybe you should read it again, or explain what you think they are trying to say. They don't argue against funding pensions, now or later. What they state is that the decision of what level to fund at is "a policy decision that must consider the broad public good".

Regarding funding pensions now, what is actually written is

"Funding a pension plan now allows for more funds to be available later to meet the same sort of needs then. The decision of how to allocate public funds to meet public needs is appropriately decided through public discussion, elections, referendums and legislative action. These decisions are not actuarial in nature. We may have a role as a profession to educate policy makers and the public about the consequences of certain actions, but it is outside of our scope of responsibility to determine that a pension plan needs to be funded rather than those resources being used for another purpose or being retained by the taxpayers. We must be careful to work from an advisory role rather than attempting to influence public policy."

All of those statements are factual.

I'm not one of the authors of the paper, but it seems clear to me what is stated. I think you are reading into their letter sentiments that aren't there.
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  #15  
Old 10-31-2014, 09:04 AM
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Originally Posted by Lane Meyers View Post
Maybe you should read it again, or explain what you think they are trying to say. They don't argue against funding pensions, now or later. What they state is that the decision of what level to fund at is "a policy decision that must consider the broad public good".

Regarding funding pensions now, what is actually written is

"Funding a pension plan now allows for more funds to be available later to meet the same sort of needs then. The decision of how to allocate public funds to meet public needs is appropriately decided through public discussion, elections, referendums and legislative action. These decisions are not actuarial in nature. We may have a role as a profession to educate policy makers and the public about the consequences of certain actions, but it is outside of our scope of responsibility to determine that a pension plan needs to be funded rather than those resources being used for another purpose or being retained by the taxpayers. We must be careful to work from an advisory role rather than attempting to influence public policy."

All of those statements are factual.

I'm not one of the authors of the paper, but it seems clear to me what is stated. I think you are reading into their letter sentiments that aren't there.
"Funding a pension plan now allows for more funds to be available later to meet the same sort of needs then. "

No, that is twisting the reality on the head. Funding a pension now pays for today's services today. It is the failure to fund the pensions now that is theft.

If I walk through the supermarket and notice that one of the registers is open and no one is there watching it, not taking $1000 out of the register is not being altruistic and 'allowing the store to free up funds for future activity". It's called not stealing and being a criminal.

Pension actuaries want a free ride. P&C actuaries have no control over the reserves management sets, but they have to give an opinion of if it is accurate or not. I feel like pensions should be the same. Pension actuaries should be required to make a statement that the pension plan is reasonably funded, and will be able to meet the obligations of the pension plan in the future. If the plan funding does not meet that requirement, then the plan should be terminated.

Actuaries primary responsibility is to the public, not our employers or principals. And that's not just today's public, but tomorrow's as well.
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Old 10-31-2014, 09:16 AM
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Quote:
Originally Posted by Lane Meyers View Post
Maybe you should read it again, or explain what you think they are trying to say. They don't argue against funding pensions, now or later. What they state is that the decision of what level to fund at is "a policy decision that must consider the broad public good".

Regarding funding pensions now, what is actually written is

"Funding a pension plan now allows for more funds to be available later to meet the same sort of needs then. The decision of how to allocate public funds to meet public needs is appropriately decided through public discussion, elections, referendums and legislative action. These decisions are not actuarial in nature. We may have a role as a profession to educate policy makers and the public about the consequences of certain actions, but it is outside of our scope of responsibility to determine that a pension plan needs to be funded rather than those resources being used for another purpose or being retained by the taxpayers. We must be careful to work from an advisory role rather than attempting to influence public policy."

All of those statements are factual.

I'm not one of the authors of the paper, but it seems clear to me what is stated. I think you are reading into their letter sentiments that aren't there.
Not all of those statements are factual. "We must be careful to work from an advisory role rather than attempting to influence public policy" is a statement of policy, if you will, not of fact.

I don't want to put words in MH's keyboard, but I think he's saying that unfunded pension plans are basically theft from the future generation(s) and 'to steal or not to steal' shouldn't be a public policy decision.

I think he's right, but it's an argument that has already lost in the court of public policy.
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  #17  
Old 10-31-2014, 09:43 AM
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I would believe that unfunded pensions are theft from future generations if I thought the pensions would actually get paid in full.

I'm thinking that reality is catching up, and no, they won't get paid in full.

So unfunded public pensions are theft from future generations and current employees.

Doesn't that make you feel better?
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  #18  
Old 10-31-2014, 09:58 AM
Jeremy Gold Jeremy Gold is offline
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http://www.pbs.org/newshour/rundown/...nsioners-safe/
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  #19  
Old 10-31-2014, 10:16 AM
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I would believe that unfunded pensions are theft from future generations if I thought the pensions would actually get paid in full.

I'm thinking that reality is catching up, and no, they won't get paid in full.

So unfunded public pensions are theft from future generations and current employees.

Doesn't that make you feel better?
Current employees are here and now, and can demand higher pay and lower pensions if they think they are being stolen from. Many of them can also vote for/against the representatives that are making the underfunding decisions.

I am worried about the unrepresented people that are having a huge tax burden place on them. I personally think it should be illegal for public pensions to use current tax dollars for anything other than funding the obligation earned in the current year. All the underfunding should fall on the participants or the trustees.
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  #20  
Old 10-31-2014, 10:44 AM
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MH, I strongly agreed with all of your earlier posts. I would like to modify your last post somewhat. First, I agree that newly accrued benefits must be funded in full as earned (at something like market rates of discount). Second, however, any existing unfunded is not solely the responsibility of current participants and trustees. It is the accumulated responsibility of employees (current and former), trustees, and taxpayers (current and past).

We can eliminate trustees despite any responsibility they may bear because their pockets are so shallow in comparison to typical unfunded liabilities.

How to divide the unfunded between current and future employees and taxpayers must be negotiable since the only theoretically right answer is to charge past employees and taxpayers. The faster that we make up for the shortfall (whether on the backs of taxpayers or employees), the more likely we are to capture those past employees and taxpayers who are still around.
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