Stay Vigilant - Frontline Pension Documentary

Discussion in 'Non Sun City Related Discussions' started by Emily Litella, Dec 8, 2018.

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  1. Emily Litella

    Emily Litella Well-Known Member

    Deleted.
     
    Last edited: Nov 14, 2022
  2. BPearson

    BPearson Well-Known Member

    Damn Girl, you know how to get my juices running wild on a beautiful Saturday morning in Sun City AZ. I've long said i am a little strange and this post probably only helps prove that contention. My guess is the vast majority of those opening the thread will not even come close to staying with the video till the end, and that's if they open it at all. Pensions are usually a topic that doesn't draw much interest. Especially these days when so few have a defined benefit plan.

    I try and stay away from calling up the memories of my past life. Nope, loved what i did, hated how little difference i could make in the grand scheme of things. More on that later.

    I served as a trustee on both health care plans and defined benefit plans. I quickly learned i wasn't the smartest guy in the room but also knew the ability to understand them was as simple as being willing to learn. I got involved with an organization that did trustee education and had the good fortune to work on numerous programs to teach trustees to be more effective/better versed in what they were expected to know and do. Often it was an exercise in futility. They were always held in really nice settings and all too often they were little more than all expense paid vacations.

    Health care plans were a captive audience as the market dictated much of the outcome. Sure there were things we did that worked, but in the end, as costs rose, there was only so much you could do to offset the increases. When i retired we were working towards building a network of "centers of excellence." Unfortunately i left and most of that work went for naught. Too bad because it had enormous potential.

    Defined benefit pensions are/were a whole other discussion. Most of the crap they are trapped in today is of their own making. I came to understand quickly that benefits paid out should be wholly crafted based on dollars paid in. Pretty simple equation: You go to the bargaining table, negotiate a contribution rate and establish benefits from that. It worked well for years, but pension funds got sloppy. For years they used conservative actuarial assumptions (yearly return on their investments) and used some of those dollars to buy pension improvements from them. Again, not a bad practice as long as you were very conservative in your assumptions.

    Then a funny thing happened when Clinton was in office. Pensions had trillions of dollars in assets and those returns exploded. Most funds were using 4-6% assumptions on returns, when in reality some funds were seeing as much as 20% returns. The cash was rolling in and trustees often bought significant benefit improvements for their employees/members. The problem was simple, yearly returns weren't a given, benefit improvements were forever (or so people thought). Smart funds found ways to enrich participants (usually through an extra check during the year) while dumb funds increased benefits with no strategy should the crap hit the fan.

    We were in private sector trust funds and tended to be more responsible. Public sector funds were awash in cash and the easy solution was to negotiate benefit increases with no need to fund them. As you saw in the video you posted E, local and state government bodies used money they should have been paying into the funds to look good. They spent it on other things and now, they are drowning in debt. The market crash destroyed many funds, leaving employers and participants in a world of hurt. The tragedy was, it could have been avoided or at the worst, minimized.

    I left organized labor fairly frustrated. We had the potential to reach out to one of the largest constituency groups in the USA; workers who almost always get the short end of the stick. It wasn't always like that. The changes we saw in the 80's where companies were gutted and sold off to corporate raiders and multi-national corporations became the order of the day was the beginning of the end. I begged those in organized labor to look at the big picture but virtually every union out there was only interested in protecting their own turf. The day i retired i gathered the staff and told them what we went through were the good old days, what was in front of them was all going to be butt ugly...kind of like the link to the video you posted E.
     
  3. BPearson

    BPearson Well-Known Member

    I forgo to mention, during the video Emily posted from PBS, they showed a clip while talking about retirement from that old Sun City promotional video, The Beginning. Very cool.
     

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