The Motley Fool Discussion Boards

Previous Page

Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: Proposal to end public pensions Date:  7/10/2013  12:39 PM
Author:  jerryab Number:  428370 of 535130

Nope. That liability has been "tort reformed" away.

Only if that law survives a lawsuit--especially by a large group. The big problem is *still* borne by the municipality in its "due diligence" required to select the insurance carrier getting the payment(s). By definition, if the benefits are NOT paid by the insurer selected by the municipality (for any reason), then the municipality is "on the hook" once again for those benefits. The liability is for breach of due diligence by the municipality to the employees--and thus the municipality is required to "make good" on their contractual obligations.

Paying the money to the employees directly eliminates the risk to the municipality--but raises the cost AND shifts the risk to the employees. Hence, it costs the municipality more in "cash now" but costs the municipality "zero" in the future.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us