A sensible sermon on pensions

kidmugsy

http://www.bloombergview.com/articles/2015-02-24/new-york-plans-the-next-pension-crisis

greenglide

Oh dear. New York state run (think of London and Boris) DB pension scheme for private sector workers (an extension of the LGPS scheme)!

Really!

But US Cities, Counties and, presumably, States can go bankrupt to get out of their pension liabilities can't they!

Remember Detroit (not much news about that recently) and others!

jamesd

The defined benefit option would be a horrible one for employees. As grenglide wrote, US cities can go bankrupt and when they do the pension schemes and pensions for employees suffer because they are not segregated from the city liabilities.

kidmugsy

States can't go bankrupt. But they don't need to; they have sovereign immunity. (Or so I have read somewhere.)

But the sensible-sermon part was, I thought, her point that really the individual has to save at about a 15%-of-salary rate, and if necessary to cut expenditure to allow himself to do so.

jamesd

Maybe, but that plan was for the city and that did almost go bankrupt, in 1975 surviving in part because public sector employee unions invested their pension funds in the city.