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https://www.pewtrusts.org/en/research-and-analysis/issue-bri...

The State Pension Funding Gap: 2017
Overall debt decreases but disparity grows between well-funded and fiscally challenged public worker retirement plans


/big snip

Conclusion
Even after nine years of economic recovery, most state pension plans are not equipped to face the next downturn. Policymakers have not taken advantage of strong investment markets to make progress on closing the pension funding gap, which remains at historically high levels as a share of GDP.
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Conclusion
Even after nine years of economic recovery, most state pension plans are not equipped to face the next downturn. Policymakers have not taken advantage of strong investment markets to make progress on closing the pension funding gap, which remains at historically high levels as a share of GDP.


A lot of this stuff is like computer security, people ignore proper advice and hope for the best. Then one day the lose all their date, or with pensions, realize lofty returns they were expecting and were told were unrealistic, actually are unrealistic.


I was just talking with a friend yesterday and he was mentioning how incompetence tends to rise to the top. I was kidding (maybe?) that they should teach that in schools. I have mistakenly thought the goal was to do things correctly.

Rich
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When the various localities and states pension plans go bankrupt or
default, I wonder if there would be an impact on the same state or
locality bonds?

Likely be good to be a lawyer in the areas whne the devil must be paid.
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The Detroit bankruptcy should be a useful guide. When they threatened to sell the art museum collection to pay bond holders, the public responded.

I think many got reductions in their benefits, but did not lose them.

Its always easier for politicians to paint a rosy picture and be generous in giving things away or making promises for someone else to fill. Raising taxes to pay for the benefits is always unpopular. Borrow first. But when the bills come due, what do you do.

You change your ways only when lenders are no longer willing to play.

Then will you raise taxes or sell major assets. Airports? State parks? Sell and lease back the state capital? Office buildings.

You would expect cuts in many services. And may cash in advance before selling anything to the state.

When crush comes to shove, what will voters tolerate. They will of course blame someone else. (PG&E all over again.) We shall see what happens. Property owners are probably going to be stuck footing the bill one way or another.

Wikipedia: https://en.wikipedia.org/wiki/Detroit_bankruptcy

In May 2014, legislation was introduced giving Detroit's retirement systems a $194.8 million lump sum as part of the state's $350 million commitment. If pensioners accepted the deal, they would not be able to sue the state over pension reductions; this was seen as a critical step toward getting support from the Republican-majority legislature. Some Republicans, such as Speaker of the House Jase Bolger, wanted unions to make contributions to help in the Detroit settlement. Another condition sought was that of a financial review commission modeled after the New York State Financial Control Board that oversaw New York City's troubled finances during the 1970s and 80s. After unions agreed to contribute money towards the settlement, the Michigan House passed legislation with major bipartisan support on May 22.[81] Governor Snyder called the legislative package an opportunity to change the direction of Detroit.[81] The state Senate would follow on June 3 and soon after. Upon passage, the Detroit News called the final legislative package a "grand piece of work," and the Detroit Free Press opined that the deal showed lawmakers "get it.".[82][83] In total, Judge Rosen's plan was able to raise $816 million from the various entities to create the Grand Bargain.

Early in negotiations, the city's retirees saw themselves threatened with in cuts of 50%. However, with the grand bargain those cuts were reduced to a 4.5% with no cost living increases. Over the spring and summer of 2014 more than two-thirds of Detroit retirees voted in favor of the deal.
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No. of Recommendations: 6
I was just talking with a friend yesterday and he was mentioning how incompetence tends to rise to the top

Sounds like they were referring to a misread of the Peter Principle.

"Everyone rises to their level of incompetence."
---Laurence J. Peter




http://www.businessdictionary.com/definition/Peter-principle...

Observation that in an hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they become progressively less-effective because good performance in one job does not guarantee similar performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who popularized this observation in his 1969 book 'The Peter Principle.
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