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thenewtbaron t1_ja3dzpd wrote

Reply to comment by CatOfTheDecade in Pennsylvania Makes Progress Toward Public Employee Pension Sustainability by greenhousecrtv

Ridge started it, Rendell continued it.

The shitty part, is that if they paid in like a normal company 401k, you know, matching up to a certain point.... The pension system would be fine. You have to invest even in the crappy market because eventually it won't be crappy. And that thing you bought forn50$ now costs 500$.

Even matching half up to the rate the pa employees put in retirement would be 3% and the state didn't even pay that in for like 29 year

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CatOfTheDecade t1_ja3o19z wrote

Not sure why you're being downvoted, but this is exactly how investments work. You keep contributing even when SHTF because nuances of your investments notwithstanding, you're buying $500 shares for $50.

There's a point where given average annual returns of x% over any given ten-year rolling period, the pension becomes self-funding. If employees are vested for y # of years, it becomes impossible for any employee to withdraw more than their contributions (and the resulting compound interest) contributed to the fund.

Pensions are fundamentally sound. It's corruption and mismanagement that kills them.

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