I'd like to see the original calculations they used as a basis for these decisions.
Puerto Rico has always assumed that the economy would soon be turning the corner and everything would work out, with a healthy helping of cargo-cult New-Jerseyism.
I wonder what the solution for this is.
It's also why I don't understand all the whining (here and elsewhere) about requiring the Post Office to actually fund its pensions rather than just assume Uncle Sam will have infinite funds to cover it later, and we Totally Won't Renege or anything.
Some people believe the post office is required to pay quite a bit more into those pension funds than is necessary for their financial well being. Nobody in that discussion claimed or assumed the government has infinite funds to cover the post office's obligations.
It's as if you were having a discussion with yourself that happened to occupy the same space as another, ongoing discussion on the same topic. Hence the way some tried to engage with you (unsuccessfully) and some just downvoted you.
A complete argument would look like this: "It's unfair to require the post office to fund future benefits by X standard, when common, reasonable practice is to use more lenient standard is Y."
A complete but stupid argument would have X="include all obligations forever" and Y="ignore stuff after 75 years". This is because post-75 years can have non-trivial implications for its sustainability, and assuming them away does require belief in a bottomless pit.
I'm interested in an exchange of ideas on this issue; I just wish people were capable of presenting a defensible argument about the Post Office pension requirement. Your own argument on the thread [1] does not meet that standard, as it was just "wow, that would be a lot of money". Well, yeah, if you've promised something with a (net discounted present) value of $75 trillion, then yeah, it's gonna be a pain to fund! Why is that an unreasonable requirement that you not just kick the can down the road?
I'd like to hear an intelligent answer to that question. "They hate the Post Office and want it to fail" doesn't count as one.
You're being entirely too generous to yourself by characterizing your attitude as "frustration."
I'm not particularly onboard with their solutions, but they are the only group of people I can see who fully recognize the problem: democracies are fundamentally short term focused and unable to do complex planning. They are certainly well worth reading (obviously skeptically).
It is incidentally this solution that it seems they are taking with new hires.
Congress must act to clear the roadblocks here. It is disgusting to say that the current and future generations to pay for pensions that they don't get if they were to join today. I think that's the only reasonable solution.
Of course, nothing will happen because old people vote and young people don't. So much for "think of the children" and all that talk.
They assumed a few key things:
- Makeup of workforce. Government in 1970 was an army of clerks with higher turnover which has since shifted to professionals with automation. - historically reasonable inflation - economic growth - 7-9% annual returns
Few places actually find their obligations and those who do (like New York) pay dearly when the market goes south. I've been told that in the 60s the assumption in New York was 5% inflation, population of 40M in 2010, booming industry in western and central NY, etc. Also, the change in status for women changed the dynamic -- secretaries and clerks were contributing big bucks for pensions they would never receive!
Require everyone in the agency to put 100% of their salary into the pension fund, or double your budget for staff salaries and direct it to pensions.
The amendment brushed off concern about
future financial strain on the pensions,
saying their investments were producing
revenue twice what actuaries had
approved, so the “measures won’t be
burdensome.”