Pension deficit at $34 Billion

Started Nov 17, 2012 | Discussions thread
Bill Randall
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Re: Pension deficit at $34 Billion
In reply to Lee Jay, Nov 19, 2012

ljfinger wrote:

Bill Randall wrote:

ljfinger wrote:

Bill Randall wrote:

ljfinger wrote:

Bill Randall wrote:

ljfinger wrote:

Bill Randall wrote:

The retirees have to be paid in cash (check). Asset deficit means you do not have the assets (cash) to cover the expense of the retirees. Where does the cash come from?

No, that's not what that means. It means your current assets do not match their total obligations. That's okay in the short run but it means you'll eventually run out of money if you can't get the situation to reverse before that happens.

Total obligations as in current AND future? Alright, that makes sense. Thanks for correcting me.

Now, if the agency finds it cannot meet it's current obligations then it will have to come from the government tax payer. Is that right?

Or they have to reduce their payments.

From the link: "The agency has now run deficits for 10 straight years." It seems to me a responsible agency would not have let this go on for 10 years.

And how would you suggest they change it? The rates they charge and the amounts they pay out are governed by law.

If it is a government agency and they can have congress or whoever change the law. The risk they are insuring is obviously greater than they anticipated. Therefore, raise rates. Are they suppose to let the $ 34 Billion continue to grow?

Since Congress set up the rules, they have to wait for Congress to fix it.

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Lee Jay
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Congress doesn't fix anything until it is broken. One might have expected Congress to fix Medicaid, Medicare and Social Security before passing the most expensive bill in history: healthcare.

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