400,000 Americans In Jeopardy As Giant Pension Fund Plans 50% Benefit Cuts

Friday  19 February 2016

The Fed and US federal government have been ruining this country ever since the Federal Reserve Act of 1913 was [un]officially passed under questionable circumstances.  The middle class in America have been destroyed.  Pensioners have been struggling because the federal government has been doing everything to save the globalist’s banking system, purposefully keeping interest rates low.  This means those Americans who have been saving for retirement are being punished with little to no measurable return on their savings, and retirees are being wiped out for lack of interest income upon which they had been relying.

However, the federal government does not have to not have to pay out more in interest payments on accumulated debt, and the globalist’s banking system is able to borrow at 0% interest and “invest” in US Treasury bonds no other country wants, anymore.  All banks are insolvent, being kept functioning by false reporting of assets that are really worth pennies on the dollar were they marked to reflect today’s value.  Banks survive and people suffer.

This article typifies what is going on for too many Americans, while at the same time, Obama trumpets how well the American economy is doing.  This is reality and not any kind of “conspiracy theory.”  Our recent article on bank bail-ins, Be Prepared Bank Depositors.  You Time Is Coming, is to make more and more people aware of the financial crises they face, both immediate and to worsen, month by month, and the worst is yet to come.

 

“I Guess It’s Food Stamps”: 400,000 Americans In Jeopardy As Giant Pension Fund Plans 50% Benefit Cuts

Dale Dorsey isn’t happy.

After working 33 years, he’s facing a 55% cut to his pension benefits, a blow which he says will “cripple” his family and imperil the livelihood of his two children, one of whom is in the fourth grade and one of whom is just entering high school.

Dorsey attended a town hall meeting in Kansas City on Tuesday where retirees turned out for a discussion on “massive” pension cuts proposed by the Central States Pension Fund, which covers 400,000 participants, and which will almost certainly go broke within the next decade.

“A controversial 2014 law allowed the pension to propose [deep] cuts, many of them by half or more, as a way to perhaps save the fund,” The Kansas City Star wrote earlier this week adding that “two much smaller pensions also have sought similar relief under the law, and still more pensions are significantly underfunded.”

“What’s happening to us is a microcosm of what’s going to happen to the rest of the pensions in the United States,” said Jay Perry, a longtime Teamsters member.

Jay is probably correct.

Public sector pension funds are grossly underfunded in places like Chicago and Houston, while private sector funds are struggling to deal with rock bottom interest rates, which put pressure on expected returns and thus drive the present value of funds’ liabilities higher.

Illinois’ pension burden has brought the state to its knees financially speaking and in November, Springfield was forced to miss a $560 million payment to its retirement fund. In the private sector, GM said on Thursday that it will sell 20- and 30-year bonds in order to meet its pension obligations.

At the end of last year GM’s U.S. hourly pension plan was underfunded by $10.4 billion,” The New York Times writes. “About $61 billion of the obligations were funded for the plan’s roughly 360,000 pensioners.” Maybe it’s time for tax payers to bail themselves out.

Speaking of GM, Kenneth Feinberg – the man who oversaw the distribution of cash compensation to victims who were involved in accidents tied to faulty ignition switches – is now tasked with deciding whether the Central States Pension Fund’s proposal to cut benefits passes legal muster. “Central States’ proposal would allow the retirees to work and still collect their reduced benefits. But some are no longer able to work, and the idea didn’t seem plausible to others,” the Star goes on to note.

“You know anybody hiring a 73-year-old mechanic?” Rod Heelan asked Feinberg. “I’m available.”

“I’ll have to go find a job. I don’t know. I’m 68,” Gary Meyer of Concordia, Mo said. “It would probably be a minimum-wage job.”

To be sure, retirees’ frustrations are justified. That said, the fund is simply running out of money. “We simply can’t stay afloat if we continue to pay out $3.46 in pension benefits for every $1 paid in from contributing employers,” a letter to retirees reads.

The fund is projected to go broke by 2026. Without the proposed cuts, no benefits at all will be paid from that point forward.

According to letters shared with The Star, cuts range from around 40% to 61%. “[The] average pension loss was more than $1,400 a month,” the paper says.

As for what will become of those who depend upon their benefits to survive, the above quoted Gary Meyer summed it up best: “I guess food stamps. Hopefully not. It would be a last resort.”

Don’t worry Gary, you aren’t alone…

Despite what the graph says, unemployment is not falling, and the economy is not growing.  The economy is failing and unemployment is growing.

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