Bailout Shutdown

Apparently, among the non-essential government activity being shut down these days is movement on the bailout of multiemployer plans. The MPRA website has not been updated since Christmas and the Bailout Committee website since the week after Thanksgiving. But that does not stop Congress from pushing a bailout bill or Joshua Rauh from polemicizing against it.

[T]this proposed bailout of organized labor’s retirement plans would cost federal taxpayers billions — while setting a dangerous precedent that would expose taxpayers and laborers to more financial mischief.

………

Mr. Neal’s plan to address “multiemployer” pension plans — private-sector arrangements between firms and labor unions such as the Teamsters or United Mine Workers — would be catastrophic to adopt. These pension plans cover around 10 million individuals, and measured properly they faced a funding hole of $722 billion as of 2016.

…..

The loan approach is based on the idea that if the plans get a low-interest loan from the government, and then invest the proceeds in risky assets and target a high return, the loan can be repaid in full. Mr. Neal argues that this proposal does not constitute a bailout because “the federal government is simply backstopping the risk.” But the loan program is in effect a taxpayer bailout. Ultimately, the taxpayers lose if the plans do not return to fiscal health. In fact, the proposal now in Congress is similar to disastrous pension obligation bond issues under which state and local governments went on to sell bonds to the public and put the proceeds at risk in investments that they hoped would earn high returns.

Union and employer representatives who serve as trustees of these multiemployer pension plans have chosen not to make the difficult choices. Anticipation of a federal bailout encourages this irresponsible behavior.

Rather than pass pension bailout plans, Congress needs to establish rules that require at-risk pension plans to immediately stop making new promises before any federal assistance is extended. Such rules already apply to single-employer pension plans, so that unlike unions, companies with troubled pension plans have a strong incentive to go with 401(k)’s instead.

If there is federal assistance, it should be as part of a resolution process in which troubled pension plans are wound down. In addition, union plans should be required to measure liabilities accurately.

Mr. Neal’s bailout plan does not require any of these conditions. It sets a terrible precedent for a bigger, looming problem: Underfunded state and local government pensions. These public plans cover around 30 million active and retired cops, firefighters, teachers, etc. and are run by state and local governments.

According to both my calculations and those of the Federal Reserve, these promises were underfunded by $4 trillion as of 2016. States like Illinois, New Jersey and Connecticut, where pension obligations pose a serious threat to public finances, may conclude their pension promises to school teachers and public safety officials will be bailed out, too.

While Congress understandably wants to find ways of protecting hard-working people hurt by pension defaults, the proposed legislation would only exacerbate the pension problems.

Congress should act now to protect taxpayers from the consequences of irresponsible financial behavior by unions and state officials.

I agree with one clarification. Pension Obligation Bonds are a stupid idea for public plans in that they pass costs onto future generations of taxpayers but there is logic (however demented) behind arbitraging for revenue whereas these bailout loans will be going to pay retirees and loan interest. There is no investing to be done by bankrupt plans so the smokescreen of generating  alpha is ridiculous. This would be a flat-out bailout with bells and whistles to confuse those who need (or want) to be confused and designed to blow up in 30 years, if not sooner.

56 responses to this post.

  1. Posted by skip3house on January 24, 2019 at 8:58 pm

    Deed was done. Now, let’s educate kids in 8th grade arithmetic, send them home to teach their parents/grandparents. No sense wondering how they approved of these ‘plans’, too late. Prepare them for real world arithmetic, and penalty for believing others’ promises instead of controlling own savings plans.

    Reply

  2. Posted by Tough Love on January 24, 2019 at 9:38 pm

    Nice post John ……………… can’t wait to read John C. Anderson’s response with more of his BS that the MEP proposal is a “loan” and not a “bailout”.

    Reply

    • Posted by NJ2AZ on January 24, 2019 at 10:36 pm

      hey now, it could totally work as a loan…as long as every unrealistic rosy assumption baked into the whole mess comes to pass

      Reply

      • Posted by Tough Love on January 24, 2019 at 10:45 pm

        Unlike State & Local Pension Plans (many even in WORSE shape), these MEP Plans don’t have “taxing authority” and many are ALREADY way beyond the point of no return.

        Reply

  3. The “Bail Out ” Committee expired on Nov 30th as per the law that formed it , with not being able to come to the necessary consensus of “5” “D” & “5” “R” votes… Looks like “7” plans are in review by Treasury, the last most recent approval was Western States Office & Profession Employees plan….In the 116th Congress HR-397 was a Re-introduction of the expired HR-4444 of the 115th Congress…The promises that were made or rather the collective bargaining agreement that peaked in the late 1990’s that I retired under in 2001, have steadily under pressure since that time frame been reduced or tightened. There are many factors contributing to this Baby Boomer phenomena, like the Equity corrections of 2000-03 and the Great Recession. So those retiring near twenty years later do not benefit from the “30yrs and Out” program @ any age with $3,000 that I received is not available now, reductions for early age retirement before “65” are in effect…I don’t know how many more “BS” FACTS you can handle all at once. But there are clearly set limitations on loan funds that are to be used to defease the liabilities for plans in “Critical & Declining” DOL status to pay the finance of retired lives. Actually the Casino mentality of 7-7.5% ROA is not allowed by those accepting entrance into the PRA program…… The costs were at first estimated at $100B, but then Cheiron Actuarial and others had tried all the C&D plans at the time and the CBO made a statement based on in part Cheirons work reducing the cost to $34B….As time went by the addition of each new entry into “C&D status raised the last reported amount needed to $ 48.9B. But the facts are the longer the wait for a Congressional FIX the greater the cost. But even with that a proposed BAIL OUT shortly proposed near the end of the Joint Select Committee life was for the PBGC to be considerably more than that last figure….Mr Rauh’s opinion is just more of the same speculation meant to discourage the unique solutions that the BLA Loan Program With Payback brings as the most beneficial solution for all parties….. HERE’S A SUMMARY YOU MIGHT NOT HAVE HAD ACCESS TO YET… https://lookaside.fbsbx.com/file/Summary%201.8.19.pdf?token=AWzSS9IqNUE5hSr63zmY0wrPvBdGKIfvwAiuBSJO4PXYZSLc4jVInPkQC4H3yQnUsJxvd-4CYz4KskPHR_nUWcENSB6F0eV3Zy5c2kr6k5t3ejaxwBiMHYpwrnnUVWnvKLw-ZGYd9M9Mnn4iL3gd_b1S THEN ALSO THE TEXT OF HR-397/4444…can be found in the Ways & Means New Release…https://waysandmeans.house.gov/media-center/press-releases/neal-introduces-bipartisan-legislation-address-multiemployer-pension?fbclid=IwAR2tfnFISYquu1c2jNpLpaZDLQ9bjuoi9RmrpXOSotKmyStv8stuoc3yyNQ Other odds and ends, Gideon Bragin, Sen Brown expert pension staffer has changed positions and now is working for Speaker of the House in near the same capacity except for the use and benefit of the “D”a

    Reply

    • just more of the same speculation meant to discourage the unique solutions that the BLA Loan Program With Payback…
      ==
      John, you are either bat shit krazee,or a big scammer. One of the two. I am going with the latter-scammer.
      🙂

      Reply

  4. The “Bail Out ” Committee expired on Nov 30th as per the law that formed it , with not being able to come to the necessary consensus of “5” “D” & “5” “R” votes… Looks like “7” plans are in review by Treasury, the last most recent approval was Western States Office & Profession Employees plan….In the 116th Congress HR-397 was a Re- introduction of the expired HR-4444 of the 115th Congress…The promises that were made or rather the collective bargaining agreement that peaked in the late 1990’s that I retired under in 2001, have steadily under pressure since that time frame been reduced or tightened. There are many factors contributing to this Baby Boomer phenomena, like the Equity corrections of 2000-03 and the Great Recession. So those retiring near twenty years later do not benefit from the “30yrs and Out” program @ any age with $3,000 that I received is not available now, reductions for early age retirement before “65” are in effect…I don’t know how many more “BS” FACTS you can handle all at once. But there are clearly set limitations on loan funds that are to be used to defease the liabilities for plans in “Critical & Declining” DOL status to pay the finance of retired lives. Actually the Casino mentality of 7-7.5% ROA is not allowed by those accepting entrance into the PRA program…… The costs were at first estimated at $100B, but then Cheiron Actuarial and others had tried all the C&D plans at the time and the CBO made a statement based on in part Cheirons work reducing the cost to $34B….As time went by the addition of each new entry into “C&D status raised the last reported amount needed to $ 48.9B. But the facts are the longer the wait for a Congressional FIX the greater the cost. But even with that a proposed BAIL OUT shortly proposed near the end of the Joint Select Committee life was for the PBGC to be considerably more than that last figure….Mr Rauh’s opinion is just more of the same speculation meant to discourage the unique solutions that the BLA Loan Program With Payback brings as the most beneficial solution for all parties….. HERE’S A SUMMARY YOU MIGHT NOT HAVE HAD ACCESS TO YET… https://lookaside.fbsbx.com/file/Summary%201.8.19.pdf?token=AWzSS9IqNUE5hSr63zmY0wrPvBdGKIfvwAiuBSJO4PXYZSLc4jVInPkQC4H3yQnUsJxvd-4CYz4KskPHR_nUWcENSB6F0eV3Zy5c2kr6k5t3ejaxwBiMHYpwrnnUVWnvKLw-ZGYd9M9Mnn4iL3gd_b1S THEN ALSO THE TEXT OF HR-397/4444…can be found in the Ways & Means New Release…https://waysandmeans.house.gov/media-center/press-releases/neal-introduces-bipartisan-legislation-address-multiemployer-pension?fbclid=IwAR2tfnFISYquu1c2jNpLpaZDLQ9bjuoi9RmrpXOSotKmyStv8stuoc3yyNQ Other odds and ends, Gideon Bragin, Sen Brown expert pension staffer has changed positions and now is working for Speaker of the House in near the same capacity except for the use and benefit of the “D” Caucus…. Anything else that I can help you with ?? Or I’ll fill you in from our point of view if that would help your understanding any. Don’t really appreciate the negative remarks from the Greatest Experts on here, but gladly will help those civil enough for a discussion, or I can get nasty too and start talking about your lives beyond pension issues I’m sure you’d appreciate..

    Reply

    • Posted by El Gaupo on January 24, 2019 at 11:16 pm

      Don’t hold your breath John. One in particular will put her blinders on. Compromise is not in her vocabulary and she sees you as a private sector moocher. I wish the best for you my friend.

      Reply

      • Posted by Tough Love on January 24, 2019 at 11:33 pm

        LOL …….. a Public Sector “moocher” befriending a MEP “moocher” …….. with BOTH looking to rip off the Taxpayers.

        Reply

      • That the nicest thing anyone has ever said to me on here, Don’t hold your breath… Thank You for your spark of Humanity. Its a long hard battle and seems the Wall & Shut Down are sucking all the air out of the issue. Many of us, Bipartisan Bunch, encourage a Horse trading deal…THE WALL with all the other incidentals for the BLA Legislation. When Public Pensions start imploding, GOD HELP US ALL… but the creators of the BLA, say that the formula of covering liabilities with loans and well regulated investment strategies could work for PP also ??

        Reply

        • Posted by Tough Love on January 24, 2019 at 11:45 pm

          Quoting ……………. ” Many of us, Bipartisan Bunch, encourage a Horse trading deal…THE WALL with all the other incidentals for the BLA Legislation. ”

          WOW ………. talk about self-interest. !
          ———————————

          Quoting ………………… “When Public Pensions start imploding, GOD HELP US ALL”

          NO, that’s what the Taxpayers NEED, for these State & Local Plans (with their ludicrously excessive benefit levels) to “IMPLODE” and with benefit levels reset at the MUCH MUCH LOWER level that can supported by EXISTING Plan assets and no more.

          Greed HAS consequences !

          Reply

          • Two different animals we are talking here, what I planned my life around was collectively bargained and still allowed for a Company Profit. While Public Plans have no product to profit from, only the ever increasing burden to the tax payer, which we all are. But those Folks are the ones that can in their last year bolster their pensions up to unbelievable amounts…like $100 K +… WE in Multis can’t pull that off, the average for CSPF pensioners is about $1197…. But some UPS’rs back in NY make I’ve heard around $5K, quite a difference, but even those NYST have taken multiple reductions the last one was 29%. On top of previous reductions. Ours, or more personally mine is a matter of survival…Disabled, after “12” Orthopedic Surgeries and no way to regain those lost years of wealth accumulation that I was planning on, had to stop at thirty, but should have IF health would have permitted stayed another “15” years. Then I could handle more uncertainty, but for the vast majority 86% we live Check to Monthly Benefit Check… Interesting “Furloughed Gov’t Workers” are getting all the News by being Financially ruined by missing two pay checks, an article about them, or even all Americans is that 78% live check to check…having debt payments equal to earnings, that’s their faults in many cases…IMHO

          • Posted by El Gaupo on January 25, 2019 at 12:12 am

            See John! I rest my case. She is a windbag for sure. Told you she thinks your a moocher. A man who probably has busted his ass his whole life and made to feel like a welfare recepieant by the likes of TL and her ilk. Don’t let her get you down, my friend. She probably doesn’t even know what hard work is…she is in finance. If she really was doing well for herself she wouldn’t give a rats ass about how much we will get. My guess is she doesn’t realize the sacrifices you’ve made over the years for your family. A true family man would always look out for his clan first, but at the same time never begrudge another man(or woman) for what their compensation package was. I wish the best for you my friend.

          • Posted by El Gaupo on January 25, 2019 at 12:18 am

            I think the fed workers are getting the attention because it is perceived that the idiot, clueless politicians can afford to miss paychecks and the average worker can not. But yet they still in many cases have to come in and work instead of picking up a temp job and it is the politicians that caused this not the workers.
            By the way, we are on the same side my friend. What I have was collectively bargained as well. The fact that I’m employed by the govt and you a private company makes not a bit of difference. We are both the backbone of this great country. Much more so than our common foe, TL. Who would rather you starve on the street because she doesn’t get what you get. 😭

          • Posted by Tough Love on January 25, 2019 at 12:25 am

            John C, Anderson.

            Glad to see you acknowledge the obnoxious antics of participants in PUBLIC Sector Plans…… as well as the ludicrous level of their basic pensions ………. far greater than those of comparably-situated Private Sector workers at all income levels.

            While MEP benefit levels aren’t as obnoxious as those granted Public Sector workers, there is ZERO justification for ANYTHING (e.g. something called a “loan”) that might even remotely turn into a taxpayer-funded “bailout”. We (the Taxpayers) were NOT a party to the MEP Pension Plan arrangements that were solely deals made between the Unions and the participating companies……. and we should not be making you whole.

            While I’m not sure if it’s possible, it seems to me that the participating companies MUST have known (likely for decades) how underfunded your Plans were, but just “let it ride”. A court might just find that inexcusable, complicit in the poor outcome, and liable for damages. THAT is the pathway you should follow …………. and NOT calling for the UN-INVOLVED taxpayers to bail you out.

            You will NEVER convince me that the Taxpayers should bailout MEP Plans (beyond the CURRENT-EXISTING PBGC maximums).

          • Posted by Tough Love on January 25, 2019 at 12:28 am

            Quoting El gaupo to John C. Anderson ……………..

            “The fact that I’m employed by the govt and you a private company makes not a bit of difference.”

            Yeah …………… when pigs fly !

          • Posted by El Gaupo on January 25, 2019 at 12:34 am

            Of course he will never convince you. And you are always right so he must be wrong. Analyze again what he said, disabled at 30 years old or 30 years on the job? Big difference. Because he states that he would’ve worked another 15. Does that mean retirement at 45? Or more likely he worked 30 and got hurt around age 50-55 and planned on working till 67 or so when he would also be eligible for SS. Unlike me. John that is why police have higher pensions than most. Because we do not collect social security. Yes TL I know. We don’t put in either and neither does the town I work for. That mitigates there side of pension contribution somewhat. Fact. So don’t try to spin it.

          • Posted by El Gaupo on January 25, 2019 at 12:40 am

            TL. The fact that two human beings choose to work for different employers, one private one public does not mean a thing in terms of the value that that person does or does not bring to society. Just saw those pigs flying. I put my pants on the same way he does.
            In all honestly, you seem to have been at this for YEARS if not decades. When you first realized that police have it so good, why didn’t you do the right thing and join the force?? Serious question?? I could have tried to go to law school if I though that lawyers make so much $$$$! Or medical school for that matter. Divorce attorneys)good ones) charge $600 and up an hour. Not for me to say they make too much, I could’ve went that route. You could’ve too.

        • “…but the creators of the BLA, say that the formula of covering liabilities with loans and well regulated investment strategies could work for PP also “
          Well if they “said it” (or read it on the “internet”), then it MUST BE TRUE!

          Reply

          • The creators I speak of, excuse me for not making that clear. In my other brief forays into the Jungle here. I mentioned Russ Kamp… Kamp Consulting Solutions on FB and Ron Ryan, Ryan ALM….Google the names they were part of the team than assisted Sen Brown & IBT VP John Murphy along with others, like Cheiron actuarial. They are featured post on my TPC FB page that keeps our Grass Rooted pensioners informed..

  5. Posted by Tough Love on January 25, 2019 at 1:48 am

    Elk Gaupo,

    In the Private Sector MOST workers get compensated consistent with their contribution to their employer’s bottom line.

    In the Public Sector compensation is based on how effective the horse-trading is between the Unions and the Elected Officials …. with the Taxpayers ALWAYS being the “suckers” in the room and ALWAYS paying more than the “fair value” of the services received.

    Reply

  6. Posted by Tough Love on January 25, 2019 at 3:03 am

    No El gaupo, everyone else isn’t “wrong” and you are “right”. It’s VERY simple ….. Public Sector workers are OVERCOMPENSATED via ludicrously excessive pensions & benefits that are financially destroying our States, Cities, and Towns.

    http://www.governing.com/columns/transportation-and-infrastructure/gov-infrastructure-funding-retiree-costs-pensions-opeb.html

    Reply

  7. Posted by Tough Love on January 25, 2019 at 3:17 am

    Interesting reading and on-point with Blog-posts and commentary on Burypensions:

    https://www.theamericanconservative.com/articles/the-culture-war-over-our-fiscal-crisis/

    Reply

    • It’s not a culture war. It’s a generational war, conducted without mercy by Generation Greed, which uses tribal issues to obscure it.

      As for those superior rich, would happen to the value of their assets and their businesses profits if the federal government stopped printing money so they could pay Americans less and sell them more? Did you notice what happened when the Fed raised interest rates to (horrors) TWO percent?

      Reply

  8. Posted by Marcia on January 25, 2019 at 9:00 am

    John…sincere question here. If the average payout is what you say, that is below PBGC limits. It is already recognized that PBGC will need a bailout to provide the limit to all of the plan members who will need it. Why is there a much bigger bailout being requested if 1) that insurance limit was already well known, and 2) the average benefit is below the limit so will not be affected?

    Reply

    • Marcia… Single payer under PBGC is much much higher than Multi Employer maximums, ours based on my $3000 Monthly would be $36,000 Annually, the PBGC max for my with 30years service is $12,870… Single payer for comparable at age 65 is $67,284 or close to that. This disparity isn’t really protecting much for us. When CSPF participants were polled as to who could live on taking away full pensions and living on $12,870…. 100% stated they could not financially survive on it… What will be requested is just what it will take under the “BLA” to defease their benefit liabilities. so last announced it went from $34B to $48.9B, and now probly’ $52+B or more, the longer it waits the more funds fall. The Voices that still call this Loan Program with Payback, refuse to take a deep look and consider the experts that were there…

      Reply

      • Posted by Tough Love on January 25, 2019 at 1:04 pm

        Just love the gobbledygook terminology.

        How about INSTEAD of saying “defease their benefit liabilities”, you be aboveboard and say ………… “give us a big handfull of OTHER people’s money” ?

        Reply

      • Posted by Marcia on January 25, 2019 at 7:45 pm

        I’m missing something here. Above you said the average CSPF pension is $14364 a year. That isn’t much higher than the PBGC limit. Given that fewer higher salaries tend to skew wage averages….I said that most should be under the limit.

        Also…as far as living on $12870 a year…..I don’t understand. I thought only public employees didn’t pay into SS. Wouldn’t you be earning more like $14k (average SS) plus $12870? That sums up to a bit under $30k which is the country’s national average.

        Something either doesn’t add right or I’m misunderstanding something significant in your argument.

        Reply

        • Posted by Tough Love on January 25, 2019 at 8:46 pm

          MEP employee DO participate in SS.

          John C. Anderson is like everyone else trying to justify grabbing OTHER people’s money ……. e.g.,., leave OUT the details that don’t support your agenda.

          Reply

          • Posted by Marcia on January 25, 2019 at 10:42 pm

            Actually I think I now see something I previously missed. I think John is my age….early 50s perhaps…far too young for old age SS. I think he is saying that he is disabled and can’t work…..but in that case, he should apply for disability. I can see why he noted the living income w/o SS…..but that shouldn’t be the case for the vast majority unless they all retired way early.

  9. Posted by Analyst on January 25, 2019 at 10:10 am

    Regrettably , smart people need to be fact checked as well . Stanford should be embarrassed with some of the misinformation presented by Rauh . To be specific , his claim that the loan is allowed to invest in high risk investments is false. Rauh made same
    Claim in his testmony, he either hasn’t read
    The bill nor is being purposefully misleading . The bill specofically says that loan proceeds only go to
    Pay retiree benefits , can onlybbe invested in low risk bonds and annuities. Furthermore , it has to be demonstrated that the loans can be repaid , we can be politically skeptical , but as a financial expert, we should at least be required to show our work .
    Rauh’s shoddy analysis may lead someone to overlook at least one part of his analysis that is worth considering , any congressional support should include a review of benefit reform and also a review of investment practices for the rest of the portfolio .

    Reply

    • Posted by El Gaupo on January 25, 2019 at 10:26 am

      I propose no more COLA for SS recipients until we are well funded as a country. All those seniors who are too dumb to invest properly are their own. Medicare too. Why the hell should I pay for Grandpa’s lung cancer when the wolf is at my door. Get rid of Medicare and let old folks pay for the health care from their SS checks. And NO cost of living raise for them either. Let them move in with their kids as was done generations ago!!!! I want no part of it. In fact, why are we even writing SS checks while the govt is closed??? Back pay it after Trump opens the govt again. Build the wall!!!! Build the wall!!!!
      Get back to zero based budgeting and then start from scratch. If this country was run like the Koch brothers run their business, we would so much better off. We would win bigly, in fact we would be sick of the winning. I’m sick of your average whiner that ignores the debt and wants his SS to increase every year on my back.

      Reply

      • Posted by NJ2AZ on January 25, 2019 at 11:44 am

        I am a 36 year old (consider myself gen X, not millenial). I ‘rationalize’ my payments into SS by telling myself they are going to my 67 year old father (who in 5 years has already taken out way more than he every put in, i’m sure).

        only way to keep from getting livid about the whole scheme :p

        Reply

        • Posted by Tough Love on January 25, 2019 at 1:09 pm

          FYI, All but lower income workers get a VERY poor return on their SS contributions (excepting those with a non-working spouse who gets the added 50%).

          Reply

          • FYI, All but lower income workers get a VERY poor return on their SS contributions (excepting those with a non-working spouse who gets the added 50%).
            ==
            Some time ago (at least 25 or 30++ years ago) I read the AVERAGE SS recipient is paid out for 6 years of SS, but only paid in for 3 years of overage (their SS payments would only fund 3 years in retirement, instead of the 6 they are pulling out). I wish I had the source for that stat, but it was so long ago, may or may not hold true today.

          • Posted by Tough Love on January 26, 2019 at 12:48 am

            Rex, with the significant increase in both the EE & ER SS contribution rates, and as well as the Taxable wage base, combined with only marginal increases in the SS “bend points” used in the SS monthly benefit calculation, the ROI has assuredly been negatively impacted over the past few decades.

          • Posted by Tough Love on January 26, 2019 at 12:51 am

            Rex, forgot to also mention……..

            Any calcs comparing pay-in vs pay-out needs to adjust for the time vale of money.

            I.e., The financial comparison needs to accumulate in-flows and discount outflows to a common point in time.

        • Posted by stanley on January 25, 2019 at 2:01 pm

          “…are going to my 67 year old father (who in 5 years has already taken out way more than he every put in, i’m sure).”

          Most economists consider the employer SS payment as part of the employee’s pay.

          Reply

      • Posted by stanley on January 25, 2019 at 9:22 pm

        “All those seniors who are too dumb to invest properly are their own. Medicare too. Why the hell should I pay for Grandpa’s lung cancer…”

        Health care would be much better if people carried a catastrophic plan and paid out of pocket for routine care. The health care sector could organize itself to serve paying customers. And the customers would have an incentive to take better care of their health

        Sooner or later the Social Security payments will be reduced either in what you get, what it buys or both. Probably best to plan for haircuts in SS. It’s good that El Gaupo Uno is starting the campaign.

        Reply

        • Posted by Tough Love on January 26, 2019 at 12:28 am

          Quoting ……………

          “Health care would be much better if people carried a catastrophic plan and paid out of pocket for routine care. The health care sector could organize itself to serve paying customers. And the customers would have an incentive to take better care of their health”

          That’s exactly correct. Give it some thought ……… “EVERYONE” can’t have SOMEONE ELSE paying for the costs of their healthcare.

          And, there would be little resistance to implementing such a plan IF there wasn’t profound pressure AGAINST doing so BECUASE certain politically-connected groups would lose a BIG ADVANTAGE that they now enjoy.

          Example ………… El Gaupo will get (and evidently most, if not all currently retired NJ Police now DO GET) FREE healthcare. Think he is willing to give up that ADVANTAGE so that the NJ Societal cost of healthcare coverage can be equally shared by everyone?

          Does my advocating for such a structure make me someone trying to “financially destroy” Police, or would Police Officers advocating to keep their advantage make they moochers?

          Which sounds like the more accurate answer?

          Reply

      • Posted by PS Drone on January 25, 2019 at 10:53 pm

        EG – I would agree with your suggestions the moment that your pension gets cut back to $60K @ age 66, not a day before. And you can pay for your own healthcare via Obamacare for the 10 or 15 years before you hit Medicare age. Oh, forgot…no more Medicare so I guess you would be on your own dime for that.

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      • Posted by Joe on January 27, 2019 at 9:20 am

        The only reply I can give to your absurdity is : Stupidity is not a crime, your free to go.

        Reply

    • Posted by stanley on January 25, 2019 at 2:14 pm

      “Pay retiree benefits , can onlybbe invested in low risk bonds and annuities. Furthermore , it has to be demonstrated that the loans can be repaid , we can be politically skeptical , but as a financial expert, we should at least be required to show our work .”

      Mr Analyst, maybe you should show your work? And low risk bonds! Which universe are you finding the low risk bonds in? Rauh is a credit to Hoover Institute and Stanford. The plain fact is that we are bankrupt. The world is floating on an ocean of debt and needs to start whacking, you know, pull a Andrew Mellon, liquidate everything! Cleanse the rottenness from the system.

      Reply

    • Posted by MJ on January 26, 2019 at 8:51 am

      I would want to know a lot more about poor Carol….did she work before retiring from Panasonic…..she worked 26 years at Panasonic with an early retirement? How old was she?? 2600.00 per month promised for life????? 20-30 year life expectancy from age 56 would be more years than she actually worked.

      I guess the moral to the story is to depend on yourself to save for retirement and whatever you get extra in the end from the government

      Moral of story don’t depend on the government for your retirement…be like Marica not like Carol

      Reply

  10. Posted by Brian on January 25, 2019 at 3:46 pm

    If I loan you $1 and I’m absolutely certain that you will repay it, that’s definitely a loan.

    At the other extreme, what if I’m certain that you are not going to be able to repay it, not even a penny? That’s clearly not a loan, that’s a gift.

    The intermediate case is interesting. We don’t have clear terminology for what to call that. What if I loan you $1 knowing that you’re going to bet that dollar on a coin flip? If you win, you have $2 and you will then certainly repay me the $1 you owe me. If you lose, you have nothing and I will not get anything back on the ‘loan’.

    In financial economics, that would be a high-risk loan, and the expected payoff would be $0.50. If I agreed to make the loan, I’d be “expecting” to lose $0.50 even though that is not the ultimate payoff ($1 or $0) I would get in either of the possible outcomes. From a financial economics perspective, my $1 transfer to you would be equivalent to a loan of $0.50 plus a gift of $0.50.

    The less likely it is that I get a full return of $1, the more similar the transfer is to a gift and the less similar it is to a loan. Real world transactions are vastly more complicated, and the range of potential outcomes is huge.

    Reply

    • Posted by Brian on January 25, 2019 at 3:47 pm

      From what I understand of the structure and the analysis of the proposed Butch Lewis act, it sounds like the probability of the plans paying off their low-interest loans at the end of the term would be close to the median outcome. Close to 50-50. Given that this payoff would depend on their existing asset portfolios (excluding the loaned amount, which would be invested in low-risk instruments) continuing to earn relatively high rates of return in risky investments, this means there is a substantial probability that the plan will not be able to repay the loan in full, and a significant probability that they won’t be able to repay a large portion.

      It’s not entirely a loan, and not entirely a bailout, but reasonable people can disagree about the extent to which it is either.

      Reply

  11. For those of you who are not aware the legislation called the BLA was written by the IBT and renamed the BLA to solicit sympathy by using Butch Lewis who passed away fighting his OWN Unions MPRA legislation. Brown wanted Hoffas name off it because of the well documented allegations of corruption against the IBT and the Hoffa name. But of course they counted on Murphy and Hoffa keeping their mouth shut which they did not. The NUCPP who do not represent retirees but are nothing more than mouth pieces for Hoffa and have taken money from Hoffa and the IBT(how much they will not admit) called everybody liars and swore the IBT had no part in it. Now we have this admission”Russ Kamp… Kamp Consulting Solutions on FB and Ron Ryan, Ryan ALM….Google the names they were part of the team than assisted Sen Brown & IBT VP John Murphy along with others, like Cheiron actuarial. They are featured post on my TPC FB page” Send before we keep going be aware the the MPRA legislation was NOT written by Miller or Kline but is the work of the NCCMP/Unions. The NCCMP is not made up of the evil corporations as the NUCPP Propagandist, in their ongoing campaign to protect the Unions,Hoffa and Nyhan claim. The NCCMP is made up of UNION International leaders and their fund admins. It is financed by the UNIONS.They went to plan B, rob retirees, after their 2010 attempt to get taxpayers dollars failed in 2010 with the Casey and Pomeroy Bills..

    Reply

  12. Curious.How many Unions besides the Teamsters support the Hoffa Act. The NCCMP/Unions are opposing this legislation and demanding the feds make it easier for cut applications to be approved. They are opposed to any legislation which increases oversight and oppose ANY language that says they cannot make high risk alternative investments.So I ask you. WHAT Union will allow any of their funds to apply for these loans under the act that has language that says not only cannot they not seek cuts under MPRA but must restore the cuts they spent so much money to get.How about a survey. Now the NCCMP says the Central sates fund can no longer apply for cuts using MPRA. So they are after this loan program to serve what.The claim that the Central Sates fund will be insolvent in 2025. Despite the lies and BS that these loans WILL be 100% paid back another NCCMP rat,Segal,on behalf of the NCCMP/Unions declared that is false..

    Reply

  13. The Team that assisted IBT John Murphy.The IBT and Murphy can kiss our retired asses.In regards to Russ Kamp… Kamp Consulting Solutions and Ron Ryan, Ryan ALM…are they on the IBT payroll??I am sure they are not on the Team for free. Also Cheiron actuarial is an NCCMP rat and on more Union fund as actuary than can be counted.

    Reply

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