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Author: akck Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76398  
Subject: Re: Buy years or buy stocks Date: 9/13/2013 12:51 PM
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Again, a guarantee is only as good as whoever stands behind it. All the laws & state constitutional requirements mean nothing if/when the state has no money.

The financial stability of a pension plan is always a concern and as I questioned earlier, the OP and other Colorado pension recipients should be well aware of its viability and what legislators can and can't do to it. One protection is that the state can't declare bankruptcy to get out of paying benefits.

What would happen if you paid all that money by buying years, but when it came time to collect on the pension, they said, "Sorry, we've had to change the deal."?

I agree that there should be another source of retirement income, but it's unlikely they'd be able to change the deal since it's the employees contributing from their salaries. The likely outcome is that the deal is changed for new employees. That's what happened in my state where there are 4 pension tiers, changes affecting new hires with each tier change. However, pension benefits are protected in the constitution (I believe only 9 states do this).
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