Yesss!!! Hidden Pension Fiasco May Foment Another $1 Trillion Bailout by Taxpayers

B

ByLoSellHi

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout by Taxpayers

By David Evans



March 3 (Bloomberg) -- The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

The CTA, which manages the second-largest public transit system in the U.S....

http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home
 
Quote from TGregg:

Time to buy another case of Vaseline.
More...

They could have sent each TAXPAYING American (how many of us are left?) a case of this paid for with the stimulus package, at the very least:

31SYWN8B0GL._SL500_AA280_.jpg
 
Pennsylvania also has problems, huge deficits and only way to make that up is tax increases. GM is getting killed by pension costs, is any bailout money going to support GM pensions?
 
Baby boomers can watch re-runs of
"Leave it to Beaver"

It should at least bring back memories of the
good old days.
 
Quote from ByLoSellHi:

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout by Taxpayers

By David Evans



March 3 (Bloomberg) -- The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

The CTA, which manages the second-largest public transit system in the U.S....

http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home
More...

You have to "hope" for the "next" bull market....:cool:
 
Interesting article, but isn't this how pensions work anyway? They never have the needed assets to cover their liabilities. Not to mention that companies are required to add money to the funds every year by law.

Additional insight would be interesting.

-troll
 
Quote from codetroll:

Interesting article, but isn't this how pensions work anyway? They never have the needed assets to cover their liabilities. Not to mention that companies are required to add money to the funds every year by law.

Additional insight would be interesting.

-troll
More...
No, that's not really how pensions are supposed to work. A couple of years ago they had coverage ratios that were quite a lot higher and a much smaller duration gaps. Sadly, what you need to realize is that pension funds in many cases are run by famous idiots, who often just buy stocks, close their eyes and hope for the best. So quite a few of them never bothered to do the whole asset-liability management thing that they're supposed to be getting paid for. The rest is history and it's happening right across the world. The UK, Netherlands, US, you name it. Yet another part of the financial system that was completely incapable of dealing with asset prices actually going down, not up.
 
We're all screwed. The US is one big GM. Tied down like Gulliver by making promises to its workforce which it now cannot afford to keep, without extracting every last nickel from those of us who were never on a union payroll.

Want to know why stocks continue to head towards zero? Its stuff like this article. Forget BO. He's irrelevant.
 
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