The collapse of pensions begins. One of the largest pension funds just let it be known that most of those covered and contributing will most likely receive nothing in return.
407,000 private sector workers are about to lose most of their pensions.
The Central States Pension Fund, which handles the retirement benefits for current and former Teamster union truck drivers across various states applied for reductions under that law.
As deep as the fund has proposed cutting the pension benefits, it’s not enough.
The plan filed for 60% cuts in pensions. The Treasury Department has the final say. The verdict came in today: “cuts not deep enough”.
Without government assistance, they will run out of money in the next 10 years.
The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.
At that time, pension benefits for about 407,000 people could be reduced to “virtually nothing,” he told workers and retirees in a letter sent Friday. Via zerohedge.com
And, this is only just the beginning. Most pension funds are grossly underfunded and unable to cover all the benefits promised, all the way up to Social Security.
In “theory,” they could “print” money to pay the pensions. However, every time you print money without value (especially by governments or their proxies), you drive up the cost of goods. The net affect is that the poor person on a fixed pension is able to buy less and less over time.
Those dollars inflate the cost of goods as the value of the currency loses value, that’s why it’s called “fiat currency.” It’s a fake, it’s worth nothing.