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How about holding the fund
How about holding the fund managers, union bosses, and politicians responsible for perpetrating this fraud criminally and financially responsible rather than passing the bill to taxpaying riders?
Even if you prosecuted people
Even if you prosecuted people for this, there's no way a dozen or a hundred people are going to come up with a billion dollars.
There will never be any consequences for this sort of thing. Look at Venezuela for an example. Or Detroit. Or Chicago. Or the Dallas' police and firefighter fund. The only way you combat this is at the ballot box.
Actually, how would even the
Actually, how would even the ballot box address the situation? If you're short by a billion, the best case scenario you can elect is someone honest and capable. But honesty and competence won't come up with a billion either.
Prosecuting is not about getting the billion dollars. It about setting an example so people in power would desire to stop creating situations like this.
That said, given we are already in this situation. With exception of some incredible luck and windfalls of investments, there's not a lot of painless paths. Someone going to pay for the shortfall. And the prime candidates are pension cuts, taxes, or fare hikes. I hope there are better answers than that.
Get used to this
Next bear market you will see pension funds dropping like flies. Don't know if it's a year off or 5 years off, but it'll be ugly.
Yep and people keep voting in
Yep and people keep voting in Union backed Democrats. Rinse and repeat...
Please explain the specific connection
Or I might dig up all your "Look MA is a red state because we gots another republican governor" posts.
Who do you think handed the management of these funds to republicans who invested them in order to make maximal profits for themselves despite long-term volitility? Hmmmm?
It is undeniable that
It is undeniable that something like 90%+ of all political donations from Unions go exclusively to Democratic politicians. That is a fact. Feel free to read up on how the Chicago/Illinois pension system is doing in the time being...
Guess what?
A lot of people who work for the state are retiring because they are being FORCED to retire or be laid off by our Republican Governor.
Previous Republican Govs offered buyouts, too.
Maybe you should stick to what you know or skate away.
Responsible for what?
In 2007 it was 92 percent funded. Then two things happened, both beyond the control of the pension board.
1. Great recession. Stocks took a dive.
2. MBTA employment numbers continue to fall, resulting in more pensioners than workers paying in.
These are structural problems outside the pension fund. Yes, they shouldn't be assuming 7.75% return. Yes, they need to figure out how to get more in (or less out) going forward, at least for a while, to get the fund stable. But sending people to jail? For what?
If you think the fund was
If you think the fund was really 92% funded in 2007 I've got the Zakim bridge to sell you.
Pension fund accounting makes Hollywood accounting look honest.
Who is saying anything about
Who is saying anything about fraud? Reality is the MBTA is over bloated and overpays some employees by massive numbers. The pension is a symptom of that.
Gosh I love my 401k.
Even if you love your 401k,
Even if you love your 401k, you'd be head over heels for your MBTA pension.
No doubt about it, the MBTA
No doubt about it, the MBTA pays people huge bucks and the pensions reflect it.
But if the rug falls from under them a pension is not so great.
This is exactly why, despite
This is exactly why, despite my job providing a pension fund we pay into (it's deducted from our paycheck, no option), I pour extra money into a 401k. Not that the private fund isn't subject to market forces and structurally unfit to finance the lifespan people are starting to hit, but the pension just straight up is going to pay out the aging boomers and go broke, so why count on it? Same for social security. Millennials, don't count on these systems holding up for you, just pay up and suck it up like we're used to.
While we are all doing the blame game
Let's point our finger at Baby Boomers, who ruined everything.
Funny how people refer to the massively understaffed MBTA as "bloated" and then whine about bailing out the pensions. Uh ... people paying into the system support those pensions ...
No good options
There is a lot of blame to go around (I blame pols who made unrealistic promises)
regardless, as the article states, there are possible solutions, all painful
the fact that we would have to pay more taxes (or divert existing money from elsewhere) is amazingly frustrating.
As a taxpayer, this is the option I would prefer
also shocking:
In the interest of disclosure
In the interest of disclosure, the 50 year rule does not apply to any new hires or anyone hired after the last set of negotiations. During the last contract rewrite, new hires are now required to work longer and retire later -- however, obviously that didn't apply to anyone who'd already been hired under the old contract (rightfully so.)
Ironically, part of the answer is getting out a lot of these older, higher paid, cushy fat stack workers and bring in more young blood who'll have a longer mandated contribution period along with lower overall associated employment costs (health insurance costs, lower seniority). But then you have to start paying the retirees. Unfortunate situation.
When things get really bad ...
When the finances get really bad, it is sometimes necessary to cut the benefits that were promised. It does not happen often, and of course these litigation and controversy.
The wording of the applicable laws is a factor. In some states, the state constitution guarantees public worker pensions.
But, sometimes there's no choice. And that appears to be the case with the MBTA.
Examples: State of Rhode Island, City of Providence, country of Greece, City of Detroit. Anticipated: Territory of Puerto Rico.
Retiring early is the greatest job in MA
I know I harp on this guy a lot but he's the perfect example. Jim Rooney retired from the MBTA with a $100k+ year pension in his 40s, then got the gig at the Convention Center and is now head of the Chamber of Commerce in the city. You should not be able to retire at 45 from a public sector job with a huge pension that you start collecting prior to retirement age. The system existed and was gamed, I can't argue he or anyone else should lose their pension but the system needs to be radically re-worked. 20 years of work for 20 years of benefit or something.
If you are going to make allegations ...
At least do your follow up homework.
You can't do this anymore - in fact, the pension system has been extensively reworked for this reason.
Not allegations...
OK, I was wrong in that he only pulls down $68k/yr with his MBTA pension. Is that an allegation somehow? It's widely quoted in various articles about this public figure.
If this kind of thing has actually been removed, great, but I'm skeptical given how deep and thoroughly corrupted the state legislature is regarding things like patronage and insider back-scratching.
PowerPoint Presentation
The presentation at yesterday's meeting is on the MBTA website at:
http://www.mbta.com/uploadedfiles/About_the_T/Board_Meetings/MBTA%20Retirement%20Fund.pdf
The basic message is the MBTA RF is in a death spiral.
The options identified are:
T- Math
A billion dollar shortfall and in a month they will announce more bonuses and early outs for employees. At the very least they have to raise the years employees have to work before they can retire and increase the contributions they pay into the fund and stop all incentives for people to leave the agency before they reach full retirement age.
At the very least they have
They have done this.
Did they ever "fully" open
Did they ever "fully" open the books?
End defined benefit pensions
can't do much about the past, but the first rule of holes is "stop digging".
Change all these retirement options to 401K type plans going forward.
So then the fund goes broke
So then the fund goes broke even faster? It's people currently paying into it who are carrying those getting paid out right now. You switch all those current people to 401ks and suddenly there's no more money coming in, meaning payouts drag us into a crisis even faster. Unless you mean people should be required to pay into a pension they're not allowed to take from AND self-fund their own retirement, because fuck the public sector, right?
For years the trust has been
For years the trust has been in legal battles claiming it is a private trust, not subject to oversight, it's records sealed, etc.
It's beneficiaries have supported this.
OK, so be it.
Privately fail.
The public funds soup kitchens - they're welcome to avail themselves.
Maybe they can 'claw back' some of their fund's payroll.
the T has had more retirees
Brought to you by your corrupt state rep and senator. When pensions are fat and early, don't be surprised when people take advantage. It has always been thus. I remember when an MBTA mechanic who dropped a wrench would have to wait for a member of the appropriate union to pick it up off the floor for him. In the meanwhile, smoke break!
Saw this coming...
...wish I had a choice for a 401k. Lol