For Whom The Bell Tolls ...... Taxpayers

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It has become obvious that the system of pensions and benefits that the public sector has generously given to themselves is no longer sustainable. Not on the backs of taxpayers. 

The sustainability of the system varies from country to country from province to province and city to city. It is still a mystery how it ever got so out of control in the first place. 

Part of the challenge is to understand the extent of damage that this system of entitlements has cost and will cost our society. 

Disclosure
One of the important issues to understanding the extent of the damage is disclosure. Disclosure that is fair and honest. 

In the New Brunswick election one of the the hot button issues has been pensions. You can see the Super Sized poster on the side bar that shows a MB politician filling his face on pensions. This was as a result of MLAs voting to double their gold-plated pensions. 

Another issues in the pension debate in NB has arisen regarding a special pension awarded to the widow of a former premier. Parties dispute facts in pension firestorm 

Now the government is taking steps to control damage and has said the release of the information pertaining to this situation is a violation of privacy rules. They state the public has no right to information about pensions paid for by their taxes. Privacy complaint over pension details 

Extent of Damage 
To assess how devastating to taxpayers these entitlements are there needs to be disclosure.

It is acknowledged that the firestorm burning around this issue is going to get worse. The cost of these benefits and pensions are going to cost taxpayers dearly.

The Wall Street Journal warns of what is coming in an article Unfunded Public Pensions—the Next Quagmire

The next big issue on the national political horizon may be whether the federal government should bail out the many budget-strapped states and municipalities across the country, especially their overly generous and badly underfunded pension plans.

Bailing out state pensions would be astronomically expensive. According to a Pew Foundation estimate this year, the total unfunded liabilities of the 50 states' pension funds amounted to about $1 trillion in 2008. Another recent study, by Josh Rauh of Northwestern and Robert Novy-Marx of the Chicago Booth School of Business, estimated that the unfunded liability was closer to $3 trillion. Adding the liabilities of municipal pension funds makes the total even larger.

Public pension funds are in dire need of change, but state and local hopes for a federal bailout now stand in the way of change. Quashing that hope—which the Obama administration could do with an explicit statement that it will not bail out state and local pension funds—would spur the reforms we need.

The same problem exists in Canada.

Currently the universities in Ontario are struggling to come up with a way to fund the pension time bombs. Of course this cannot be done. However, the people looking at them know that the longer they can procrastinate  the more likely they are to get their gold-plated pensions. Let the next guy worry about the problem!

There have been a couple of articles about the university pensions.  
Funding gap looms large - PENSIONS AT QUEEN'S 
Pension complications worry U of G president  

They are humorous because the articles said: 

“We at Guelph have been taking steps for the last five years to make our going concern good,”

Talks have been underway for several years between university administrators and three employee groups -- the faculty association, the staff association and the Canadian Union of Public Employees -- to deal with the pension fund's woes.

 Still after five years a suitable solution cannot be found!!! 

It is interesting to note that the top guns at both the universities will have a pension upwards of $300,000 per year. This was not mentioned in either article. A pension like this has a value in excess of $4.0 Million. Should this not be part of the discussion about university pensions? 


Disclosure Again
Another outrageous situation was uncovered in California. California city manager's pension could top $30 million 

This situation was only uncovered after an investigation into the city manager's pension compensation. In some city's in California pensions are listed. This helps to avoid pension abuse. CALPERS Pension Club 

This disclosure is required here in Canada, similar to the Ontario Sunshine List. 


Here is an excellent article about pension disclosure. For whom Bell tolls 

Bill Tufts 
Fair Pensions For All