Alabama town's Failed Pension is a Warning

[LuvNewcastle]

http://finance.yahoo.com/news/Alabama-Towns-Failed-Pension-nytimes-93215960.html?x=0


PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.


Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.





snip

The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money.

[FreakinDJ]

1. Far worse was the retired fire marshal who died in June

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

you'll see a lot more of that

[LuvNewcastle]

3. Work until you drop dead.

Punch out and then crawl into a corner and die. That's what we're being told these days.

[Davis_X_Machina]

2. Mark my words. Public sector workers in general..

...and those retired ones drawing pensions in particular, will replace illegal immigrants and terrorists in the 2012 presidential campaign.

I predict the GOP nominates Chris Christie, packaging him as just the man to run the war on public employees.

I expect he’d do rather well. Crab-bucket syndrome (If I don’t have a job, then you don’t get to have one either) is bi-partisan — see discussions here on public-sector pensions — ostensibly race-neutral — but you know who those employees all are, wink, wink — and not closely identified with any particular area of the country. It’s not obviously part of the religious wars, either.

Ressentisment light—all the rage, without all the baggage.

GOP R&D may have finally developed the new product they needed, now that the patent on fighting nearly pointless wars in nearly unreachable places has expired, generics are available, and it’s in all the shops now, not just the GOP.

Pritchard will be held up as a model to emulate, not a scandal to avoid.

[jody]

4. California can't be far behind Prichard.

[ProgressiveProfessor]

7. Prichard has had long standing problems that no one wants to face or address

Makes some of the shenanigans in California look tame. Eroding tax base, miserable schools, the mayor was recently removed. Laws are regularly ignored, police protection is non existent and some say corrupt. The list goes on. Its not exactly a bell weather.

That does not mean there are not serious long term problems looming in California and elsewhere, but I would not use Prichard as an example.

[sarcasmo]

5. Destroy the pension system and the unions and you destroy the middle class.

Stone cold class warfare.

[jody]

6. Unions are not the middle class. n/t

[ProgressiveProfessor]

8. The whom do they represent?

[NutmegYankee]

9. Unions are the creators of the Middle Class. n/t

[Enthusiast]

10. You don't like unions, Jody?

Just wondering.

[jody]

11. Middle class citizens belong to unions but IMO they do not represent the middle class. Feel free to

keep your own opinion as will I.

[Enthusiast]

12. Who do they represent, then? nt

[jody]

14. Simple, unions represent their members. n/t

[adigal]

13. LOL!! Yes, I have my Masters degree, 20 years experience

teaching, and when I started my job in NY seven years ago, I was 1500 dollars above the free lunch poverty level.

You are right - union members are NOT the middle class. We are generally below it.