In the US and UK, retirement is only for the super-rich

boing
125

Pensioners do have control, if they choose to exercise it through the ballot box. If they elect politicians who don’t worship at the altar of neoliberalism they’ll have reasonable protections. That we don’t is not an individual failing but a societal one.

Yes, I’m sorry to agree with both situations. Life involves taking calculated risks, and one of the roles of regulation is to mitigate extreme risk. I’m starting to wonder if you’ve been able to set foot outside your bedroom, considering all the household hazards like radiator burns out there (not to mention what awaits outside your home if you go get groceries).

I hate to tell you this, but back in the good old days the bank was doing scary stuff with the money they were holding – like investing. They were just better at covering the losses from downturns from their cash reserves (built up through investing that money and taking a generous cut for the service). Anyone who thought the bank was handing out interest out the goodness of its heart would rightly be terrified at a change, and would probably be poorly equipped to select and honest and competent retirement fund manager.

Yes. Such is the nature of risk, which can also be mitigated by regulation, standards, etc.

Again, if the union or corporate pension fund is run by competent, honest and serious people who place fiduciary duty first the risk is mitigated while inflation is matched or slightly beaten. Any major pension fund, from IBM to GM to the California teachers’ union to the Federal employee pension system has worked this way long before Reaganism. But, bringing us full circle to my first comment, that’s a situation fewer and fewer Americans enjoy.

126

How can my vote influence whether or not my employer invests my retirement in something like a 401(k) or puts it in the bank?

Let’s not go down that road. Concerning risk… life has risks to be sure. But that does not mean you must embrace risk in your retirement.

That’s a big if when it comes to my grandmothers well being.

127

It’s the glaucoma they can’t afford to get treated…

2 Likes
128

Your vote can definitely influence how your employer invests your pension fund in terms of legally definining what is a permissible level of risk appropriate to the fund. Your vote can also turn back the tide against so-called “right-to-work” anti-union legislation. It’s all a matter of electing the right representaitves.

The problem is that you seem to be equating “embracing risk” with “investing in the equities market.” The problem with that approach is that there are blue-chip stocks that are less risky than or equal in risk to certain bonds, with a potentially higher payout.

Has she (or you on her behalf) looked into the competence and honesty and performance history of her pension fund? It’s a legitimate concern that should be investigated. As stakeholder it is her right and to an extent her responsibility to keep an eye on things if she’s concerned.

129

Well simple state what they owe.

If you can’t then they are hiding it.

Your jumble-sale and far-from-simple “explanation” of how things work in the UK’s public pension system don’t come close to addressing that, or indeed proving that the UK government is hiding the numbers

SO you needs some links.

For the UK the NI fund is the equivalent of social security in the US.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472142/National_Insurance_Fund_Accounts_Great_Britain_2014_to_2015.pdf

Here’s the latest set of numbers.

Now in accounting there are two sets of books. Income and expense, balance sheet which lists assets and liabilities.

In the accounts above.

  1. Income £91,359,851 on page.13 [80,814,248 in contributions]
  2. Expenses 93,620,435 again on page 13. [85,893,497 on pensions]

Perfectly accurate.

Observations, payments do not cover the pensions.

At the bottom of the page is the assets

  1. Assets. 20,935,278 That dropped by 2,260,584 which is the difference between income and expense. That’s the loss.

  2. Liabilities. Er, no way to be found. Missing completely.

So missing from NI {social security}

Perhaps its hiding in the other accounts, the whole of government accounts.

Now here you can find the amount owed to civil servants. That shows what they are interested in.

In 2014-15 the government’s net liability position increased by £262.6 billion, to
£2,103.2 billion. This is largely due to increases in public sector pension liabilities of
£190.2 billion and government borrowing of £78.4 billion.

Pensions for civil servants increased by compared to taxes? Massive percentage.

State pension? The amount owed to the public? Completely missing.

So why would they do that?

What’s the number for Social Security in the USA? If you say its not hidden you can find it. I’ve search, and its not there.

130

So it’s insurance rather than the national pension you were describing above (the U.S. has no national pension scheme, just SSI).

4 Likes
131

OK.

If you pay someone for a pension in the future, they owe you a pension in return for your money. In general you have a debt

If you received something of economic value in the past and as a consequence are obliged to deliver something of economic value in the future, you have a debt or liability.

  1. Why economic value? That covers money, services and goods.
  2. It’s two legged. One leg is in the past, one in the future If you are thinking of borrowing next year, you don’t have a debt now.
  3. The two legs are linked.

So social security.

  1. People have paid cash in the past. Public sector workers have provided services.

  2. Governments are obliged to pay the pension, money in the future.

  3. They are linked.

It’s a debt.

So what does the debt number tell you?

  1. The size of the intergeneration transfer.
  2. The per tax payer amount tells you if it can be paid.
  3. The annual rate of increase, compared to GDP growth tells you if they will make good.
  4. The ratio to GDP tells you if it cab be paid.
  5. The annual increase tells you how much additional taxes you need to make is sustainable.
  6. The debt to tax tells you if it can be paid.

Or if you are going to make cuts to pay, how much you need to cut from either the payouts, or from other services by diverting money. Tax being cuts exported to the individual.

If you make cuts to payouts, the before and after numbers tells the public collectively how much they have lost.

That’s why the numbers are hidden.

Unless you can find them.

132

The reserve is US treasuries.

That is not the liabilities.

Social Security Trust Fund

End of 2014 the fund “owned” $2.79 trillion. One part of the US government owing another part.

So lets say that its a real asset.

https://www.ssa.gov/oact/trsum/ is the details

Income 801.6 bn [If we take OASI]

Payments 750 bn.

So the fund would be depleted in just over 4 years.

Hmm there are lots of people who are owed a pension, who have paid in in the past, as of today, due to receive them in 80 years or more time.

ie. It’s clear that the liabilities are much large than the assets.

So from the link, what’s the total that SS currently owes?

[Hint, its not there]

133

For an insurance company, you expect assets to exceed liabilities plus a safety margin.

So what are the liabilities of SS in the US?

You seem to be having a problem coming up with the number?

134

Also because rich people only get rich by being total assholes to the entirety of society, or by being born into it and being total assholes to the entirety of society. It doesn’t really benefit people who don’t work for money to cap SSI contributions, but it screws over the entirety of society, so they push for it. And by “work for money,” I refer to ‘ordinary income’ as defined by the IRS.

4 Likes
135

Wealth is mostly relative. most people seem to consider anyone who makes more than they do as rich. But when you get to that income level, it does not seem like life gets all that much easier. This does not include people who are either actually struggling to to take care of their kids or those who own islands.

136

For my whole life, up until ten years ago, there used to be. They were called “savings accounts” and “certificates of deposit”. A lot of the totally fucked up incentives in our economy could be corrected with 4-5 percent interest on cash investments.

2 Likes
137

There are lots and lots of people, most of whose income is W-2, who exceed the social security cap.

Raising the cap hits them much much harder than it does the super rich.

But then, the upper middle class has always gotten screwed over harder by the tax code than anyone else, so what the hell, they will hardly even notice it.

1 Like
138

People earning over $127K?

1 Like
139

I think a lot of worker retirements disappearing has more to do with private equity investors using leveraged buy-outs to gain ownership of a company, selling off viable assets to fund the debt burden and emptying the pension funds and paying themselves a “special” dividend with the pension proceeds. In this scenario, played out repeatedly over the last three decades, the companies are left as mere shells, unable to operate as functioning businesses, and the deferred compensation, and that’s what the pensions are, deferred compensation , are stolen. And this is fucking legal.

140

I don’t get it.

The “fix” in the eighties was to have the boomers pay in more to the system than their parents had, to have a surplus. This surplus was then used to offset some of the deficits in the federal budget. How this is boomers making off with the goods is a puzzle to me. The whole idea of taxing working people extra to lend to the federal budget meant that a regressive tax increase would, at some point, have to be repaid with some other sort of tax revenue. The surplus story never made any sense. Now the politicians and finance assholes want to kill the system they’ve been destroying for thirty years, as was their intent, by claiming Social Security’s eventual insolvency has no fix. It has plenty of fixes, not the least being that the same folk who had their taxes lowered thirty years ago and then used the SS surplus to mask a portion of the federal budget deficit maybe, just maybe ought to have their max SS tax raised just a bit.

The real screw job started with the Johnson administration when the SS fund was incorporated into the accounting of the federal budget.

1 Like
141

OK, I have to ask. Did a pension murder your dog in front of you when you were a child? Did your wife abandon you for a pension?

What did pensions do to you to make you so angry about them? It’s OK, Nickle, you’re amongst friends. You can tell us, we won’t judge you any more harshly than we already do…

19 Likes
142

I thought that was obvious.

143

Nothing wrong with pensions as long as

(1) they are properly supported by an actuarily appropriate level of contributions, (i.e. any benefit increases are matched at the time by increased contributions)

(2) the fund managers use realistic rate of return estimates on invested funds and update them regularly

(3) pension benefits are funded from operating budgets and employee contributions, never by borrowing.

Pretty much all the “pension crises” around the country are the result of not doing one or all of these.

1 Like
144

; )

1 Like