Monday, October 7, 2013

Now, here's the stuff I've been complaining about

This fits into "The World Has Gone Mad" category.

I complain about a lot of things, but this article touches on at least two:

1.     Inaccurate and misleading "news." Well, Yahoo! stuff shouldn't really be considered "news," but it is presented that way and I wonder about the people who read the first article, before the corrections. This was evidently lifted from Reuters.

2.     Detroit. I guess I should narrow it down to what exactly I complain about in Detroit, but there are so many topics of concern. This article is about union pensions, the administration of those pensions over a long period and the "13th check."

Read it yourself, but the whole business is so symbolic of the decay and institutionalized feeding-at-the-trough mentality that has become something that people think they deserve. Not that they earned it, but they just deserve it.

The pension has a $3.5 billion unfunded liability. While the number is being challenged, I don't think anyone believes it is a lot smaller, yet the unions want to continue a practice of paying a "bonus" to retirees based on investment returns above a certain figure. That practice cost the pension funds $1.92 billion from 1985 to 2008. What if that $1.92 billion had been left to invest and reinvest? Wouldn't that have put a pretty big dent into the $3.5 billion unfunded liability?

When you practice Coleman Young's "tin-cup urbanism" philosophy, however, you expect that if you can finagle something like this now, the Federal government will come to your rescue at a later date. His rationale was always that the problem was caused by racism, so that is why Detroit's fiscal problems were the responsibility of the rest of the nation.

Meanwhile, grab all you can get right now.

Detroit union victory worth 'refund on deck of Titanic'

By Joseph Lichterman

(Reuters) - Detroit's largest public sector union scored a symbolic victory Friday when a Michigan administrative law judge said one of the city's pension funds could reinstate an extra annual pension check for city workers and retirees, and make retroactive bonus payments, although the judge in the city's bankruptcy case has prohibited enforcement of the ruling.

Bankruptcy Judge Steven Rhodes earlier this week allowed Administrative Law Judge Doyle O'Connor to rule on the so-called 13th check before O'Connor's retirement on Friday. But Rhodes forbade the parties from pursuing the matter further.

Rhodes has stayed all existing litigation against the city since taking charge of the bankruptcy case, the largest municipal bankruptcy in U.S. history. Yet on Tuesday Rhodes ruled O'Connor could proceed because a ruling would not injure Detroit.

O'Connor himself granted that the limitations imposed might offer "little more solace than an assurance of a full ticket-price refund offered while still on the sharply tilting deck of the Titanic."

Earlier this year, O'Connor read a verbal opinion supporting the case brought by the American Federation of State, County and Municipal Employees, claiming Detroit short-changed its members beginning in November 2011 when the city council ended the policy of paying bonus pension checks. The city's General Retirement System board issued the checks.

For decades prior, the city's General Retirement System would give bonuses to retirees and active employees when it earned more than 7.9 percent on its investments.

That payment and others cost the pension fund $1.92 billion from 1985 to 2008, a 2011 report to city council said.

AFSCME argued the city violated labor laws by unilaterally ending the extra checks. O'Connor said in February that "the change directly affected an existing and fundamental condition of employment."

Detroit's state-appointed Emergency Manager Kevyn Orr has said the policy contributed to the underfunding of the city's two pension funds, which he says have $3.5 billion in unfunded liabilities. The city's unions and pension funds dispute that figure.

O'Connor on Friday estimated the bonus money in question at roughly $174 million. He urged the city and union to seek a negotiated settlement of the matter.

(This story corrects the first paragraph to show judge ruled pension boards can reinstate checks. The fifth paragraph was also corrected to show the city council does not issue checks, but sets policy, and pension board issues the checks.)

(Reporting by Joseph Lichterman; Editing by David Greising and Prudence Crowther)

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