6 ms·

Most cities will spend more on pensions than on infrastructure - the average is 13.5% of total budgets: https://reason.org/commentary/city-budgets-bend-under-g

Most cities will spend more on pensions than on infrastructure - the average is 13.5% of total budgets: https://reason.org/commentary/city-budgets-bend-under-growing-pension-costs-and-dwindling-revenues/ https://reason.org/commentary/city-budgets-bend-under-growin... The pension systems across the West are fundamentally broken. If we're going to talk about ponzi schemes, pensions are the ultimate. We need to privatise pensions completely, and encourage people to work later into life. Corporations and governments should have no responsibility for pensions - if someone can physically work, but doesn't have the money to independently retire, then they should continue to work.

hakfoo 5y ago
Retirement is one of those things where it goes beyond raw economics into quality of life issues. It feels like we've broken the social contract when we say to the prior generation "okay, you did your best and sacrificed to try to build a better world for us, now keep working til you're 80 in spite of failing health and diminishing capacity." The problem with pensions isn't that the underlying math product was faulty. There are a bunch of assumed components in it-- expected retirement lifespan, rates of return on investments. There's no reason you couldn't build a robust and self-financing pension program by using conservative assumptions, but somehow the industry managed to consistently generate overly rosy models for decades. So who pays for the failure in due diligence and risk management? (I am assuming we want to actually make good for the people who contributed to these programs in good faith. It seems that most charges to fix pensions are about replacing defined benefit pensions with something lesser that demands a much higher degree of risk tolerance to have any chance of the originally promised return. I also wonder if there's some business benefits from retirement-motivated churn. At the top of the market, how much of high management is filled with people in their 60s who haven't had a fresh idea in years, but have reached a position of undisruptability? Having a low expected retirement age helps to cycle in fresh blood. Conversely, we've got a lot of seniors with cash crunches due to failed or insufficient retirement funding, stuck in low-skill jobs in a way that's likely depressing wages. The 72-year-old grocery cashier doesn't want to be earning $12 an hour, she wants to be at a rest home in Boca Raton. Send her there and the market wage rises to $15. A country that can generate a trillion dollar bookseller can find a non-house-of-cards way to care for its elderly.

hakfoo 5y ago

Retirement is one of those things where it goes beyond raw economics into quality of life issues. It feels like we've broken the social contract when we say to the prior generation "okay, you did your best and sacrificed to try to build a better world for us, now keep working til you're 80 in spite of failing health and diminishing capacity." The problem with pensions isn't that the underlying math product was faulty. There are a bunch of assumed components in it-- expected retirement lifespan, rates of return on investments. There's no reason you couldn't build a robust and self-financing pension program by using conservative assumptions, but somehow the industry managed to consistently generate overly rosy models for decades. So who pays for the failure in due diligence and risk management? (I am assuming we want to actually make good for the people who contributed to these programs in good faith. It seems that most charges to fix pensions are about replacing defined benefit pensions with something lesser that demands a much higher degree of risk tolerance to have any chance of the originally promised return. I also wonder if there's some business benefits from retirement-motivated churn. At the top of the market, how much of high management is filled with people in their 60s who haven't had a fresh idea in years, but have reached a position of undisruptability? Having a low expected retirement age helps to cycle in fresh blood. Conversely, we've got a lot of seniors with cash crunches due to failed or insufficient retirement funding, stuck in low-skill jobs in a way that's likely depressing wages. The 72-year-old grocery cashier doesn't want to be earning $12 an hour, she wants to be at a rest home in Boca Raton. Send her there and the market wage rises to $15. A country that can generate a trillion dollar bookseller can find a non-house-of-cards way to care for its elderly.