OPS Pension Fund $771M Short After Odd Investments

[Cdog923]

Among many reasons why I wouldn't work in OPS. 

[Landlord]

3 hours ago, Big Red 40 said:

I don’t agree . There are many people enjoying retirement now, partially made possible by company funded pensions they earned through years of service to a company . If companies would   put even a minimal amount  of effort into keeping the plans funded it would still work,  sadly most companies choose not to do that any more .

 

 

I don't know if I agree or not, but just because there are people who pensions have worked for doesn't negate the assertion of pensions being the worst/second worst form of retirement planning compared to other plans.

[Big Red 40]

 A pension is company money paid to me for the rest of my life after service anniversary dates are met . It’s money I didn’t have before and didn’t pay in . My 401k is mostly my own money which sometimes gains value and sometimes loses value . The pension is the much better option to me 

[BigRedBuster]

1 hour ago, Big Red 40 said:

 A pension is company money paid to me for the rest of my life after service anniversary dates are met . It’s money I didn’t have before and didn’t pay in . My 401k is mostly my own money which sometimes gains value and sometimes loses value . The pension is the much better option to me 

That only works if 

 

a) the company doesn’t go broke. 

 

B). The company manages it right. (See OPS)

 

c). The company is honest. 

 

D). The company doesn’t have to have a major downsize. 

 

Absolutly pathetic form of retirement. A 401k company contribution does the same thing you want (company money given to you). Without the fear of all the rest. 

[Big Red 40]

A tad bit of overkill to call it absolutely pathetic since its worked well for generations of people . The pathetic thing to me is that we cant trust the company to do the right thing any more.  If the company provides a decent 401 k  match yes it is free money but i doubt that alone would last as long as pension payments would.

[funhusker]

I'll be honest.  This makes me nervous.  I'm a teacher and give into NPERS every month.  We also have a 401k through my wife's work.  If I could retire tomorrow I'd be in great shape with my pension.  However, I'm not eligible to retire for at least another 20 years....a lot could change...

[BigRedBuster]

7 hours ago, funhusker said:

If I could retire tomorrow I'd be in great shape with my pension. 

 

 

As long as the pension keeps getting funded or tax dollars to fund it don’t dry up or people horribly mismanage it. 

 

Your putting a large part of your retirement in trusting someone else for the rest of your life. 

 

That at doesn’t even start to discuss the fact that the tax payers would now be on the hook for funding this and many other retirements for the rest of your life. 

 

Pretty bad system. 

[funhusker]

1 hour ago, BigRedBuster said:

 

 

As long as the pension keeps getting funded or tax dollars to fund it don’t dry up or people horribly mismanage it. 

 

Your putting a large part of your retirement in trusting someone else for the rest of your life. 

 

That at doesn’t even start to discuss the fact that the tax payers would now be on the hook for funding this and many other retirements for the rest of your life. 

 

Pretty bad system. 

Right or wrong, NE teachers don't have a choice (as far as I know).  I'm required to give and the district matches...Unfortunately there isn't a lot left to invest in other retirement options.

 

Edit:  This isn't a "woe is 'underpaid' teacher me!"  post.  Just the truth that we pay 10% every month.  I think many people would be hard-pressed to find more money to save after 10% for retirement, mortgage, all other expenses including college funds for kids.

 

I'm hoping my wifes 401k rocks it and the pension is still there.  Could be a pretty cushy retirement!

[BigRedBuster]

47 minutes ago, funhusker said:

Right or wrong, NE teachers don't have a choice (as far as I know).  I'm required to give and the district matches...Unfortunately there isn't a lot left to invest in other retirement options.

 

Edit:  This isn't a "woe is 'underpaid' teacher me!"  post.  Just the truth that we pay 10% every month.  I think many people would be hard-pressed to find more money to save after 10% for retirement, mortgage, all other expenses including college funds for kids.

 

I'm hoping my wifes 401k rocks it and the pension is still there.  Could be a pretty cushy retirement!

If it’s your only choice, it’s what you have to do. 

 

Your employer should be the one offering offering something different.

[mrandyk]

Enrolling in a pension seems like a gamble for so many reasons, when investing for retirement is never supposed to be a gamble. My employer merged into a different company starting on January 1, and instead of offering any sort of reasonable 401K match (capped at $1,000 annually, when I was getting 6% previously) this new company has a pension plan. It has me looking for a new job. Basically no one in the private sector has a pension anymore and I managed to get stuck with one of those few employers.

[BigRedBuster]

19 hours ago, mrandyk said:

Enrolling in a pension seems like a gamble for so many reasons, when investing for retirement is never supposed to be a gamble. My employer merged into a different company starting on January 1, and instead of offering any sort of reasonable 401K match (capped at $1,000 annually, when I was getting 6% previously) this new company has a pension plan. It has me looking for a new job. Basically no one in the private sector has a pension anymore and I managed to get stuck with one of those few employers.

 

You're smart.  Now, if your employer offers a pension and you are either stuck or really don't want to get a new job, then I don't see a reason not to enroll in it.  However, you should NOT be relying on it as you sole source of income as a retiree.  

[RedSavage]

On 1/19/2019 at 4:53 PM, funhusker said:

Right or wrong, NE teachers don't have a choice (as far as I know).  I'm required to give and the district matches...Unfortunately there isn't a lot left to invest in other retirement options.

 

Edit:  This isn't a "woe is 'underpaid' teacher me!"  post.  Just the truth that we pay 10% every month.  I think many people would be hard-pressed to find more money to save after 10% for retirement, mortgage, all other expenses including college funds for kids.

 

I'm hoping my wifes 401k rocks it and the pension is still there.  Could be a pretty cushy retirement!

You should look into starting a 403(b).  Just like a 401k but for non-profit organizations.  Unfortunately there's no match for teachers but it comes directly out of your paycheck.  Even if you were to get the full amount projected from the pension, you likely wouldn't be able to retire comfortably on that alone anyways.

 

Side note:  Another reason companies have gone from pension funds to matching 401k is because it transfers all the risk from the employer to employee.  With pension funds, all the risk lies with the employer.

[Mavric]

 

[VectorVictor]

On 1/18/2019 at 5:00 PM, methodical said:

 

Pensions would be great, if they were responsibly and transparently managed and enough people that were paying into them knew about investing and held their employers and trustees responsible for any questionable fund management.  The problem is people don't want to learn about investing.  Which I get... its tedious and boring when you have very little capital to manage, but they're essentially throwing their money into a black box and assuming things are going to be great at some future date.  It'd be about as smart as sending your life savings over to your idiot cousin or a greasy haired Don Jr. looking wall street guy you don't know and saying "here make this as big as possible, I'll throw you more every month and I'll be back to collect in 30-50 years." 

 

 

Great post, and I agree with your points, and would add that governments need to be prohibited from raiding them during budget shortfall periods or shorting promised contributions. 

 

For example, the (not-so-great-and-actually-getting-s****y-fast) State of Texass requires teachers to use the state's TRS (Teacher Retirement System) pension fund...to the point that teachers aren't able to collect on Social Security--the state won't allow teachers to have money taken out for Social Security from Teacher pay, and the state has rules in place that stipulate that Teachers can't collect on both Social Security and Teacher Retirements.

 

Problem is, TRS is flirting heavily with insolvency because dips**ts like Perry, Abbott, and all of their evangelical "Christian" vermin keep raiding TRS like it's a rainy day fund (in lieu of the state's actual rainy day fund. Combine this with a 20% across-the-board cut in all education spending in Texass from a few years ago (including TRS funding) that has yet to be restored to the budget...and teachers in Texass would already be striking...if it wasn't illegal for teachers to do so.   And while all of this is going on, the fund's management is shrouded behind doors that have to be kicked open repeatedly via FOIA requests, so there's no transparency. 

 

Like you said, Public sector pensions can and should be a good thing...but only if they are responsibly and transparently managed. But what happens in reality is that they're horribly mismanaged, there's no transparency, and then people of a certain political affiliation (typically the same political affiliation of the people who are running said pensions) jump up and down when the pensions fail and wax poetic on how 'pensions are (e.g. outdated, waste of money, government waste)".

 

 

[BigRedBuster]

1 hour ago, VectorVictor said:

 

Great post, and I agree with your points, and would add that governments need to be prohibited from raiding them during budget shortfall periods or shorting promised contributions. 

 

For example, the (not-so-great-and-actually-getting-s****y-fast) State of Texass requires teachers to use the state's TRS (Teacher Retirement System) pension fund...to the point that teachers aren't able to collect on Social Security--the state won't allow teachers to have money taken out for Social Security from Teacher pay, and the state has rules in place that stipulate that Teachers can't collect on both Social Security and Teacher Retirements.

 

Problem is, TRS is flirting heavily with insolvency because dips**ts like Perry, Abbott, and all of their evangelical "Christian" vermin keep raiding TRS like it's a rainy day fund (in lieu of the state's actual rainy day fund. Combine this with a 20% across-the-board cut in all education spending in Texass from a few years ago (including TRS funding) that has yet to be restored to the budget...and teachers in Texass would already be striking...if it wasn't illegal for teachers to do so.   And while all of this is going on, the fund's management is shrouded behind doors that have to be kicked open repeatedly via FOIA requests, so there's no transparency. 

 

Like you said, Public sector pensions can and should be a good thing...but only if they are responsibly and transparently managed. But what happens in reality is that they're horribly mismanaged, there's no transparency, and then people of a certain political affiliation (typically the same political affiliation of the people who are running said pensions) jump up and down when the pensions fail and wax poetic on how 'pensions are (e.g. outdated, waste of money, government waste)".

 

 

 

Here's the biggest issue with pensions.  They are funded AFTER someone retires.  Take General Motors.  During the economic down turn when the company was going through financial hardships, they had to down size and reorganize their workforce.  Their sales were down and their cash flow stunk.  BUT.....they were still on the hook for thousands of retired workers pensions.  So, their company is smaller, with fewer people working to produce the cashflow....and at the same time, they are paying for past employees.  That is a recipe for disaster.  

 

The same thing happened to the city of Detroit.  The city was flat broke because everyone was moving out.  Complete square miles of the city were uninhabited and not producing tax income.  BUT....the city was still on the hook for thousands of retired employees pensions. 

 

Those pensions are not going to get funded because the money simply isn't there.

 

The funding for a retirement account, should happen when that employee is working for the entity.  Once the employee and entity part ways, so should all financial responsibility and reliance.