Sucker!!!

Mary Williams Walsh reported in the New York Times On August 8, 2006, that in 2003, a whistle-blower forced San Diego to reveal that it had been shortchanging its city workers’ pension fund for years, setting off a wave of lawsuits, investigations and eventually criminal indictments. The mayor ended up resigning under a cloud. With the city’s books a shambles, San Diego remains barred from raising money by selling bonds. Cut off from a vital source of cash, it has fallen behind on its maintenance of streets, storm drains and public buildings. Potholes are proliferating and beaches are closed because of sewage spills. This sounds like the problems that Harrisburg, Pa. is having with its finances. Only in Harrisburg, law enforcement is asleep at their post and the voters had to take things into their own hands.

Ms. Walsh also reported that retirees are still being paid, but a portion of their benefits is in doubt because of continuing legal challenges. And the city still has to figure out how to close the $1.4 billion shortfall in its pension fund.

The State of Pennsylvania has the same large shortfall in its pension fund according to AFSCME Council 13 who represents Pennsylvania State employees. They also went on to tell its members recently that Pennsylvania teachers have the same problem with their pension fund. The New York Times went on to say that New Jersey, Illinois, Colorado, along with several other states and local governments have the same problem as San Diego did, but without the crippling scandal — at least not yet. By one estimate, state and local governments owe their current and future retirees roughly $375 billion more than they have committed to their pension funds.

http://latrobefinancialmanagement.com/Research/Pensions/Public%20Pension%20Plans%20Face%20Billions%20in.pdf

Click on the above link and read the full New York Times Story. They wrote this in 2006. Now with the 2008 – 2009 Bear Market and the spring 2010 Correction, the problem is much worse.

As I said before, you have to pay attention to your pension fund and how it is run. You also have to run your own IRA instead of using mutual funds. The Dow is down “Year to Date” 2.79%. Fund managers only try to do as well as the Dow. I am having the worst time in the market then I had in a long time. I am up “Year to Date” 17.68%. That is down from my peak on April 27, 2010 of 20.73%. I am crying all the way to the bank!