Retirement Benefits Going Forward
Not referring to current debt owed by the city to pension funds [[that will end up however court settles it), I think the entire notion of benefits should be changed. The city should pay it's contribution to an employee's retirement and health care on an ongoing basis, while that person works for the city. Something like a 401K contribution, matching up to a certain amount, that the employee puts in. "Legacy" costs should not be incurred going forward. At the end of a fiscal year, all costs associated with the work done by city employees that year should be paid. Today's labor dollars should go to today's workers [[even if in the form of retirement or medical savings accounts). This would cause people to have a better handle on their money [[because they could monitor what was in an account, not just expect an arbitrary fixed payment to start on a given date). It would also prevent a growing/shrinking tax base from having to shoulder an unsustainable burden. Lastly, it would prevent people with multiple governmental careers from collecting outsized or duplicative pensions. Your money would be tied directly to what you paid in. Didn't put much in, don't get much out. And all "senior officials" and politicians would get the exact same deal as the rank and file. No more Turkia Mullins or people who collect full pensions for several different jobs they held over the years.
all investments are skimmed
Quote:
Originally Posted by
Novine
People like MikeyinBrooklyn who trumpet the benefits of the 401k programs are simply providing cover for the skimmers of the financial world. Most 401k plans are set up with high fee funds that benefit the advisors who promote them at the expense of the people who are expected to use them. Realize that you're in over your head when it comes to financial matters as many people are? The 401k plans will offer you "professional" guidance which means another layer of fees and the "professionals" directing your retirement funds into more high fee funds at the expense of your retirement funds. When people reach retirement without the necessary funds to provide a decent retirement, we blame them and not the system which is rigged to rob them blind at every step of the way. Have a great 401k plan with low fee funds and honest advisors? Consider yourself lucky.
Realize that pension fund investments are "skimmed" egregiously by financial professionals. These funds invest heavily in private equity and hedge funds. The typical hedge charges a "2/20" fee: the fund skims 2% of your principle every year, and 20% of any returns that they make. This makes the typical retail fund [[Fidelity, etc) look like a bargain.
Why do pensions funds invest in these hedge funds? Because the results from the investment professionals often are better than they can do themselves, and a lot less work.
There is basically no way to invest money without it being skimmed, short of personally buying assets like rental housing. Having a pension board invest the money for you does not avoid the skimming.