Tag Archive for Defined Benefit Pension Plan

It’s About Time already

Michigan lawmakers look to plug the big gaping hole in government liability.

1997 was actually a good year for Michigan.

It could have been better however.  It was the year that Governor Engler signed off on pension plan changes for state employees, but not including the school retirement system. For those it did affect, It adjusted the way in which pensions are funded from defined outcomes at high risk for taxpayers, to defined contribution with real ownership to the recipients.

It also saved the state billions in the last 2 decades. 

The change to the Michigan State Employees’ Retirement System saved the state an estimated $2.3 billion to $4.3 billion in unfunded state employee pension liability from 1997 to 2010, according to the report, authored by public pension expert Rick Dreyfuss.

Seven years later we are still benefiting (no pun intended) from this change.

This 20 year anniversary could well produce the finishing touch and allow Michigan to move toward a predictable liability scenario for good.  School employees somehow remained outside of the course correction in 1997.  House Bill 4647 and Senate Bill 0401 being nearly identical, provide the mechanism for the fix to that problem that has been long overdue.

You Betcha! (9)Nuh Uh.(0)

We’re looking at a new level of cognitive dissonance coming from Lansing.

A long time ago, I would be asked to accompany family members who wanted to go to the local Fretter or Highland whenever they wanted to buy any appliances/electronics (yes, I know that I’m dating myself here). Part of it was because they knew that I had a vehicle big enough to bring home whatever they bought without much trouble. The other was that I could usually be counted on to hook it up after I brought it in.

One of the things I hated most about those experiences was dealing with the salesmen when actually making the purchase.

Even though my relatives were usually buying something listed in the newspaper ad so what we should be paying going out the door wasn’t a mystery, at the counter the salesman would always give them that sincere look and always ask them if they wanted to purchase additional items to go with what they were there to buy in the first place. Looking a little baffled at the salesman’s question and not appearing certain about how to answer, I’d step in at that point and tell them firmly, but politely, that I’ve hooked up enough TV’s, stereos, etc. to know what else I would need to get it to work and would’ve had it on the counter if we actually needed it. Being a little put off, but still undiscouraged, they turn to them again and ask about getting additional “warranty/insurance coverage” for their purchase. More often than not, it wasn’t any better than the manufacturer’s warranty. I strongly told them “no” for a second time.

At the time I didn’t know this, but they were using a technique called “upselling” which is a used for the benefit of the seller in additional to the actual sale of the item.

“Upselling” is also a technique being used by the Republican Leadership in Lansing to rationalize to the people they represent why they have abandoned their own stated principle of, ‘government practicing fiscal responsibility and allow individuals to keep more of the money they earn.’

 

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You Betcha! (8)Nuh Uh.(0)

Detroit Bailout: Why the “Grand Bargain” is actually a Faustian Bargain.

Not actually Gov. Rick Snyder

 

Like most Conservatives here, I was disappointed, but honestly not surprised in the least, by last weeks vote in the Michigan House on the “Grand Bargain”.

I say this because leading up to the vote, when my sources go dark, or when they do finally return my calls and begin to waffle, that is almost always an indication that things are going bad rather quickly.

I’m not going to mince words here. Aside from absolutely hating that misleading term “Grand Bargain”, I still can’t see why people in Lansing can’t/won’t do their homework on what is really going on here and why they are reticent on calling a bailout what it actually is: a bailout.

You’re probably asking yourselves; what causes people like that to lose their way?

Limited government and fiscal responsibility were once hallmarks of the Republican Party platform a long time ago.

Let’s take a look as to what happened, shall we?

 

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You Betcha! (6)Nuh Uh.(2)