STUMP » Articles » Tax Day Tribute: Think The IRS Would Be Happy with 80% of What's Owed? » 15 April 2016, 10:39

Where Stu & MP spout off about everything.

Tax Day Tribute: Think The IRS Would Be Happy with 80% of What's Owed?  

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15 April 2016, 10:39

Yes, it’s that time when I update the 80% Pension Fundedness Hall of Shame!

But first, let me thank my referrers:

*Pension Tsunami and Jack Dean
*Wirepoints and Mark Glennon – check out this post on how to estimate how fast Illinois has to run just to stay in place
*The Other McCain and wombat-socho. Catch wombat’s In the Mailbox feature, which updates fairly regularly.

And for a brief interlude:

NEW JERSEY PONZI

I linked to him yesterday, but I missed linking this John Bury post from yesterday on New Jersey pensions:

At the March 31, 2016 Union County freeholder meeting there was an absolutely bizarre misstatement of reality from chairperson Bruce Bergen claiming that while the pensions for state employees in New Jersey may be in trouble the employees and retirees in county and municipal plans have nothing to worry about. I rebutted such dangerous foolishness in a letter to the Westfield Leader and at tonight’s freeholder meeting went further

Bury’s letter is here, and I want to make an excerpt from the end of the letter:

When the JRS runs out of money on paper around 2021, whatever is left in the trust will keep paying them. All public employees are in the same boat. Otherwise, when there were prospective cuts to benefits or when cost-of-living-adjustments were summarily eliminated in 2011, why did it apply to local employees also if ‘their’ plans were adequately funded?

The truth is that the New Jersey retirement system is now a Ponzi scheme that can only be saved if the state is cleaned up and the money being siphoned off by a corrupt political system is diverted to propping it up. Though anyone benefiting from the status quo is unlikely to see that.

It’s a bit more delusional than saying 80% is a “healthy” fundedness ratio.

80% SCORECARD

After today’s additions, I will have 90 entries in the 80% Fundedness Hall of Shame, since it was instituted at the end of October 2014.

Of those 90 entries, 46 of them refer to 80% fundedness being a mark of pension “health”.

I know that when I pay only 80% of the taxes I owe, I let the IRS know that’s a healthy amount being contributed.

NEW ENTRIES

Here are the five new entries since my last 80% post.

From somebody who should know better – the Auditor-Controller of Orange County writes in a press release:

“This new formula should have the pension system funded at recommended level of 80% within a few years”

I’m sure the pensioners will be happy to get 80% of what was promised.

Supposedly from an actuarial consulting firm:

According to GRS, plans funded at 80 percent and above are healthy and financially stable.

I haven’t found where GRS states that explicitly, by the way. Please direct any original sourcing to marypat.campbell@gmail.com. Because if I have that in an official report, I may have some words with those responsible. Actuaries should know better.

From a non-actuary, but someone who should probably know better:

Industry standards consider a retirement system healthy if its funded ratio is at or above 80 percent; only 4 of the 13 sweetheart systems right now have funded ratios that meet or exceed 80 percent and the average among the group is 74 percent.

That’s not standard in the industry I know.

This one is an unsigned editorial, so shame on the editors of the Omaha World-Herald:

Financial experts recommend that as a general rule, retirement programs be at least 80 percent funded.

Oh, those silly financial experts.

Some folks who have delusions deeper than the 80% myth:

As of 2013, the most recent years for which data have been compiled; there were fourteen states with funding ratios in excess of 80 percent of liabilities, the conventional threshold for a safe funding level.

That’s not a convention I hold to.

Anyway, let me know how 80% of a promise works for y’all. I prefer to get paid in full.

And yes, I know, the “real” tax day is Monday. I guess the IRS wanted to ruin a bunch of weekends.


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