Employer contribution increased by 5% starting next October.
http://kingfish1935.blogspot.com/2022/12/the-pers-coals-are-gonna-cost.html
http://kingfish1935.blogspot.com/2022/12/the-pers-coals-are-gonna-cost.html
OT: Is it possible to kick the fiscal responsibility can down the road ad infinitum? (PERS related - financial wizards weigh in)
- Thread starter horshack.sixpack
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What patdog said.
Many folks where I work have retired over the past 2+ years and I know others who will be in the next few months (the younger boomers will be 59 next year and a Gen X friend my age retired earlier this year).
Many folks where I work have retired over the past 2+ years and I know others who will be in the next few months (the younger boomers will be 59 next year and a Gen X friend my age retired earlier this year).
The impact to school systems and their finances has to be bad news for education, right? The money has to come from somewhere.
the money will come from your pocket. in the form of higher property taxes (ad valorem for schools). it won't cost the schools, municipalities, or counties anything.
That was my assumption/fear, but how quickly can they raise those? i.e. is there a time period where the schools system will owe before new taxes kick in? I really need a remedial course in local government operations...
each year the districts can put in their request (it's not really a request, because the boards of supervisors can't legally deny it) for ad valorem rates. So, once per year. municipalities and counties also set rates once per year, based on budget. that increase in contribution will be budgeted in next June, for the fiscal '24 budget, unless they got guidance this year that the contribution was increasing, and put it in their '23 budgets. that could very well have been the case
Why don’t they raise the rates the employees pay too? The federal government did that and it seems to be working.
They usually do.
I expect an announcement to be made about that in the near future.
I strongly suspect that many places will increase the contribution and not give raises to employees at a minimum.
Absolutely nothing of substance will be tackled in the ‘23 session. But I do expect serious proposals to be “introduced” by way of discussion with legislators during the ‘23 session with an eye toward rolling out potential alleged fixes during the ‘24 session.
Why don’t we just print enough money to pay for everything? **
Not this time. Let’s just say that this intractable issue has the full attention of “upper management.” And beginning in ‘24, the particular “upper management” of which I am typing will no longer be burdened with worrying as much about the next election cycle.
It's debt piled on top of debt. We're borrowing to pay retirement (essentially deferred salary) to government employees for whom we borrowed to give a salary in the first place.
Governments should be required to eliminate defined benefit pensions for all new employees.
Governments should be required to eliminate defined benefit pensions for all new employees.
Or get rid of the 75% who do nothing.
I expect a lot of that will be done through attrition. I mentioned earlier that I know many folks who’ve recently retired or plan to in the near future from their PERS jobs.
But they’ll hire two people for to take their place. The first will be some supervisor’s side chick and the other will be hired to do some of the work the retiree was doing or supposedly doing.
Expect more with them spending a few more trillion. They gotta add to the pot from somewhere. Yeah I KNOW they aren't actually related but it's still the same government. I didn't plan on shoved be to the retired/disabled chain around the public neck. I'd rather be working. I come from working stock. Mom is 84 and goes into work everyday
At least they are trying, tons of pensions have failed with more in the future 
All anyone has to do is look at the most recent audited financial statement for any school district, municipality, county, or state agency. Each and everyone of them, with perhaps a few outliers, will have a government wide balance sheet with a negative "net position" - or liabilities that exceed assets. In almost every instance, the deficit is because of the pension and other post-retirement benefit liabilities. The deficits are substantial and when you sit down and think about it, you can see that all of it will not be paid without big changes in how the pensions are funded. The statement that many local officials were "blindsided" is predictable and probably accurate. It is also symptomatic of the problem. You don't need a report like this from the actuary to be clued in that the long-term pension liabilities are not sustainable. In many cases, the issue does not get much attention unless it impacts the government's annual budget - like Jackson being faced with a $3,000,000 increase in the required contribution.
Yeah, Boomers are retiring but it’ll still be an issue in part because many Gen X folks can also retire at 25 years.
That Kingfish article includes a chart about funding in 2047.
Bless your heart, you think you can do something about the machine
seems like boomers can’t balance a budget sheet. Hmm. Just another issue boomers created and my generation will have to suffer for.
As much as Boomers get grief for a lot of things, PERS was established in 1952 during Hugh White’s second term as Governor.
White was part of the Missionary Generation that was born between 1860 - 1882.
(By the way, Strauss-Howe generational theory is fascinating.)
edit to remove link — looks like the site has problems accepting mobile Wikipedia urls?
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It absolutely can be kicked down the road. $1.35 Trillion sounds like a ton, but is not anywhere near an insurmountable amount for the US of A, especially over 50 years, and double especially if you're only spending enough to kick the can. Raise contributions a bit, hit the newbies up, hit the state and fed taxpayers up a bit....spreading it around like that, it's not a big deal.
Hell, watch the Feds create special tax and interest free loans to the states to shore up the gap. Instant can kick. An extra half a trillion or so to our national debt means next to nothing.
Hell, watch the Feds create special tax and interest free loans to the states to shore up the gap. Instant can kick. An extra half a trillion or so to our national debt means next to nothing.
I find it fascinating that some people can have such different mindsets on these types of things. I wonder why two people can look at the same situation but view it so differently. I’m not saying you are wrong, maybe what you’re saying is the best way. Serious question, do you take this approach with your personal finances? Do you carry a balance on your credit card(s) or do you pay it off each month? Do you pay your entire utility bill or just enough to not get cut off?
Pensions can disappear overnight. The U.K. was in a Pension Crisis in October and is still shaky at best.
Defined Benefit Plans are the most expensive type plans an employer can have. It is a way to compete with private sector employers for good employees. However, it has a high dollar price tag and any employer who feels blindsided about the latest PERS increase has been operating in the blind themselves. Many employers do not understand what they have. They just keep paying in and expect a payoff at retirement.
They got $600 million coming their way. When I lived in Jackson, I was talking to a friend of mine (maybe 2015?) who still lives there. We were discussing the water problems and Jackson's ability to provide basic services (good roads, water, etc). He told me what will eventually happen is the federal government will fix it. They won't let a state capital fail. And that's precisely what is happening.
They were gonna give that money to somebody. I'm glad it's being spent in Mississippi. But Chokwe, his posse, and "consultants" are laughing their way to the bank. I bet at least a third of it gets pilfered, if not more.
When they changed eligibility to allow full retirement at 25 years, they doomed the system. Full retirement should be 40 years. 1.5% per year.
They can but at some point it's not a benefit but just forced savings. Right now between what the employee puts in and what the employer puts in, plus all the money put in on behalf of employees that don't vest, they are collecting plenty to fund the benefits that are accruing. The problem is that money is being collected to pay for benefits accrued in the past.
What's incredibly stupid about this is that they are making the problem worse by continuing this fiction that the amounts are tied to employees. All they are doing is encouraging more PERS participants to outsource work b/c contractors can pay better and get better employees while charging less than it would cost the PERS participants to do the work because they aren't carrying a 17% (soon to be 22%). They can pay 10% more, give a 4% 401k Match, give the equivalent insurance, and still be 2.5% cheaper on labor costs even if they didn't push their workers any harder or do the work any more efficiently, which of course they would because the savings would go in their pocket.
So for a lot of employees, PERS will go from collecting 17% of pay from the PERS employer to collecting zero when the job is contracted out.
They need to just set the current contributions based on actuarially sound practices to cover future benefits and just start assessing employers to cover past deficits and schedule them to be paid off in 60 years or something.
This affects nearly every retirement system on earth, public and private. Contributions have to go up or benefits have to go down. These plans were made based on life expectancies from 50+ years ago when your doctor was smoking an unfiltered cigarette during your appointment and gave your wife a bottle of Lysol to douche for freshness.
Yes younger generations are going to have to work longer or pay in more.. Working longer solves the labor shortage. Blame all those boomers and their predecessors for all the medical breakthroughs that will allow Gen Z to have an average lifespan of 100 years. You don't get to work from age 20-65 and enjoy 35 years of retirement and ***** about having to pay in more than the boomers that will be lucky to get half that amount of retirement on average.
75 really is the new 65.
Yes younger generations are going to have to work longer or pay in more.. Working longer solves the labor shortage. Blame all those boomers and their predecessors for all the medical breakthroughs that will allow Gen Z to have an average lifespan of 100 years. You don't get to work from age 20-65 and enjoy 35 years of retirement and ***** about having to pay in more than the boomers that will be lucky to get half that amount of retirement on average.
75 really is the new 65.