George Bauer of Troy asks a good question: “Well, where does a 70 or 75-year-old person go get a job?”
The retired Teamster is one of more than 200,000 whose pension fund could be insolvent in a decade. Blame the Recession, blame declining membership in the union’s ranks, blame merged and new systems, blame reformed federal law and blame too many other pension plans facing insolvency for the government to step in and save them all.
Managers of the Central States Pension Fund want to save the fund by cutting retiree benefits by an average of 24 percent. If retirees take 76 cents on the dollar today, they avoid receiving nothing in a decade. And rules for taking on new employment will be relaxed.
Which brings us back to Bauer’s question: Who will hire a septuagenarian, especially one beat up by a physically demanding profession?
Well, someone might. And there might have to be some benefit cuts. And there might have to be some public money.
The realistic solution is a mix. We will see a model emerge that will guide the salvation of other pension systems, because there will certainly be more.
“This is probably the biggest debt bomb we’ve got going here in the United States,” said analyst Juli Niemann, who said pensions are becoming a quaint relic.
As you check to see if there’s a pension in your future, remember that you will certainly be making payments toward a different pension. That would be the $111 billion Illinois taxpayers face to guarantee the pensions of state employees — the one group able to say, “What, me worry?”