Re:The Pension Hole for U.S. Cities and States Is the Size o...
by fbonetti on Monday July 30, 2018 @11:55PM
(#17650433)
> It's already been established that pensions can be cut in bankruptcy, so, yeah, that's not even a question.
Minor nitpick, but it’s in Illinois’ state constitution that pensions cannot be reduced. Republicans want to change the constitution to remove this rule, but Illinois is an overwhelmingly Democratic state so that’s never going to happen. It will be interesting to see how all of this plays out.
Re:The Pension Hole for U.S. Cities and States Is the Size o...
by dragonwriter on Tuesday July 31, 2018 @01:59AM
(#17650878)
> Minor nitpick, but it’s in Illinois’ state constitution that pensions cannot be reduced.
Major nitpick, but in the event of municipal bankruptcy (the context of the store you responded too), federal bankruptcy law trumps state law—including the state constitution—because Supremacy Clause. The bankrupt entity doesn't cut pensions, the bankruptcy court does.
States cannot go bankrupt, without a change to federal law. Cities can and have, and pensions have already been addressed in that context. It's not a new question.
> and the people affected are going to sue. It will take at least a decade to work up to the Supreme Court, who will find (no matter WHAT the liberal/conservative makeup at the time) that, surprise, surprise, the government is NOT legally obligated to pay out the benefits they said they would.
It's already been established that pensions can be cut in bankruptcy, so, yeah, that's not even a question.
> Various governments will try to implement various forms of austerity to make it work,
They already are to prevent running into the major crises (e.g., recent pension funding requirements reforms in California.)
> Don't worry though. This exact same thing is also happening to Social Security, which will crash around the same time, or shortly after, so everyone working now will get the shaft.
Social Security won't crash; even with scenarios projecting Trust Fund exhaustion it still ends up paying at worst something like 2/3 of eligible benefits out or current revenues out to the limit of projections.