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An obscure court decision against a Rhode Island town's police officers and firefighters could be a warning sign for Social Security

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https://www.msn.com/en-us/money/retirement/an-obscure-court-decision-against-a-rhode-island-towns-police-officers-and-firefighters-could-be-a-warning-sign-for-social-security/ar-BBIQf5o?li=BBnb7Kz

 

An obscure court decision against a Rhode Island town's police officers and firefighters could be a warning sign for Social Security

 

The United States Court of Appeals for the First Circuit gave us an interesting glimpse of the future last week when it ruled on an obscure case involving government pension obligations.

 

Ever since the mid-1990s, police officers and fire fighters in the town of Cranston, Rhode Island had been promised state pension benefits upon retirement.

But, facing critical budget shortfalls over the last several years that the Rhode Island government called “fiscal peril,” the state legislature voted to unilaterally reduce public employees’ pension benefits.

 

Even more, these cuts were retroactive, i.e. they didn’t just apply to new employees.

 

The changes were applied across the board; workers who had spent their entire careers being promised certain retirement benefits ended up having their pensions cut as well. 

 

Even the court acknowledged that these changes “substantially reduced the value of public employee pensions provided by the Rhode Island system.”

So, naturally, a number of municipal employee unions sued.

 

And the case of Cranston’s police and fire fighter unions made it all the way to federal court.

 

The unions’ argument was that the government of Rhode Island was contractually bound to pay benefits– these benefits had been enshrined in long-standing state legislation, and they should be enforced just like any other contract.

 

The state government disagreed.

 

In their view, the legislature should be able to change laws, even retroactively, whenever it suits them.


Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises.

News like this will never make major headlines.

 

But here at Sovereign Man our team pays very close attention to these obscure court cases because they often set very dangerous precedents.

 

This one certainly does. Because Social Security is in even WORSE condition that the State of Rhode Island’s perilous pension system.

 

We talk about this a lot in our regular conversations.

 

According to the Board of Trustees for Social Security (which includes the US Treasury Secretary, the US Secretary for Health & Human Services, and the US Secretary of Labor), the Social Security trust funds “become depleted and unable to pay scheduled benefits in full on a timely basis in 2034.”

 

Once again– that’s the Treasury Secretary of the United States saying that Social Security will run out of money in 16 years.

 

You’d think this would be shouted from the rooftops, especially given how long it takes to save for retirement.

 

Yet instead the news is ignored or flat-out rejected by people who simply want to believe either that it’s not a problem, or that the government has some magical solution.

 

The First Circuit just showed us what the solution is: cutting benefits.

 

And now the government has legal precedent to do so.

 

They can retroactively slash whatever benefit they want in their sole discretion regardless of what legislation exists, or what promises have been made in the past.

 

Let’s be smart about this: the clock is ticking. Sixteen years may seem like a lifetime away, but with respect to retirement, it’s nothing.

 

Securing a comfortable retirement takes decades of careful planning, and a lot of folks are going to have to catch up.

 

Fortunately there are a lot of options available, but you’re going to have to take deliberate action.

 

For example, you could set up a more robust structure to help you put away even more money for retirement and invest in safer, more lucrative assets that are outside the mainstream.

 

A number of our readers, for example, are safely earning double-digit returns in secured, asset-backed lending deals with their properly structured IRA and 401(k) vehicles.

 

Here are a couple of options to consider.

 

This problem is completely solvable. But you’re going to have to solve it for yourself. You can’t rely on the government to fix it.

 

The First Circuit Court affirmed last week without a doubt that government promises aren’t worth the paper they’re printed on.

 

 

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What about the judges, congressmen and other high level government employees that are on the taxpayers tit? Lets not forget them when we want to slash pension payouts that were funded religiously for decades by the participants. Maybe it is time to kill all the lawyers.

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municipal and state unions should be illegal.

 

that said, you agree to something, contractually,  you stand by it.

 

 

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Its been a well accepted legal fact that the U.S. government, through new laws can alter social security as they like. This court case simply extends that premis to the state of RI.

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I've always figured that I would receive no social security payments from the government. It has just been an extra 18 percent tax. Don't believe that the government cares about anyone but themselves.

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Read that last week, very interesting to see if this is used as a new precedent around the US.  

 

IMO, I wouldn't trust a pension being there if you're just starting out.  I had 6 years into a fire pension and was fully vested, didn't stop me from leaving for a new job.  I have little faith it'll be much in 16 years, it's a system that cannot support itself.  Most pension systems are so upside down it's ridiculous; gone are the days of getting on at 18 and retiring at 38.  As it should be, you cannot expect to pay in for 20, then collect for 40 years and expect that type of system to survive.  Municipals are going to 401K's, police & fire aren't too far behind.

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On 02/11/2018 at 7:41 PM, CapeDave said:

How much do you want to bet that this does not effect judges, congressmen and senators!

Take it to the bank !

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If the Gov't didn't treat SS as a money grab and had not dumped it into the general fund of the benefit world there would be no SS issue. It's given to many thousands of immigrants who settle in the US without jobs or useful skills. Political asylum seekers collect also. The hundreds billions supposedly in there are not really there at all. It's a giant I O U plan and has been and continues to be raided all the time. Have you ever wondered why you never hear of Welfare running out of money  ? Food for thought.

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4 hours ago, JoeGBreezy said:

If the Gov't didn't treat SS as a money grab and had not dumped it into the general fund of the benefit world there would be no SS issue. It's given to many thousands of immigrants who settle in the US without jobs or useful skills. Political asylum seekers collect also. The hundreds billions supposedly in there are not really there at all. It's a giant I O U plan and has been and continues to be raided all the time. Have you ever wondered why you never hear of Welfare running out of money  ? Food for thought.

Meanwhile in the land of fruits and nuts they set up santuary cites to protect illegals when the gosh darn government is bankrupt...laughable. But hey laws don't mean sheet! 

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Posted (edited)

and then let them off when they kill real humans.

Edited by HugeDinghy

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On 2/11/2018 at 7:41 PM, CapeDave said:

How much do you want to bet that this does not effect judges, congressmen and senators!

Good one! How true.

I would be far beyond rip**** if a pension was pulled or cut retroactively.  A lot of those state jobs suck...and people put up.with it because they have that pension in a very unsecure world.  Imagine working a jib like that and having a pension taken away?  I cant imagine how pissed I'd be.

 

We have plenty of money for increasing military and Pentagon spending...plenty of money for wars that never ever end...buy we "don't have enough money" to take care of fire and police and state and teacher pensions?  Or health insurance?  Now Ryan and the republicans , after increasing the national debt by trillions, want to take away social security as a means to rein in the debt.  Steal from thr poor....give to the rich.  Make america great.

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I'd be curious how much the employees have paid into their so called pensions. My mom is a retired teacher in NH, collects her pension, tax free because it's pre taxed and ss. Has taken out more in her pension benefits in 5 yrs than she paid in in 35 yrs. A town over from me the deputy fire chief retired after 30yrs of service and his pension is 9800 a month. I went into the wrong line of work. If I got in as a firemen in my 20's I'd be retired in about 10 yrs with a great pension. 

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On 2/18/2018 at 8:02 AM, blackdogfish said:

Good one! How true.

I would be far beyond rip**** if a pension was pulled or cut retroactively.  A lot of those state jobs suck...and people put up.with it because they have that pension in a very unsecure world.  Imagine working a jib like that and having a pension taken away?  I cant imagine how pissed I'd be.

 

We have plenty of money for increasing military and Pentagon spending...plenty of money for wars that never ever end...buy we "don't have enough money" to take care of fire and police and state and teacher pensions?  Or health insurance?  Now Ryan and the republicans , after increasing the national debt by trillions, want to take away social security as a means to rein in the debt.  Steal from thr poor....give to the rich.  Make america great.

Welfare dogs a chick! 

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On 2/18/2018 at 8:02 AM, blackdogfish said:

Good one! How true.

I would be far beyond rip**** if a pension was pulled or cut retroactively.  A lot of those state jobs suck...and people put up.with it because they have that pension in a very unsecure world.  Imagine working a jib like that and having a pension taken away?  I cant imagine how pissed I'd be.

 

We have plenty of money for increasing military and Pentagon spending...plenty of money for wars that never ever end...buy we "don't have enough money" to take care of fire and police and state and teacher pensions?  Or health insurance?  Now Ryan and the republicans , after increasing the national debt by trillions, want to take away social security as a means to rein in the debt.  Steal from thr poor....give to the rich.  Make america great.

Your confusing your governments. :) The Federal Government funds the military and Pentagon, the state and local Governments are the ones promising pensions to cops, teachers, etc. Many of the heartland states don't want anything to do with having the federal government fund the "lavish" pensions that many of the blue states have promised their employees. In many cases those pensions are more than the red state workers make when they are "on the job."

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