"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

New York City Joins The “Imminent Bankruptcy” Club

The “public pension crisis” is the kind of subject that’s easy to over-analyze, in part because there are so many different examples of bad behavior out there and in part because the aggregate damage these entities will do when they start blowing up is immense.

But most people see pensions as essentially an accounting issue – and therefore boring – so it doesn’t pay to go back to this particular well too often. Still, New York City’s missing $100 billion can’t be ignored:

New York City Owes Over $100 Billion for Retiree Health Care

(Bloomberg) – New York City faces future health costs for its retired workers of $103.2 billion, an increase of $40 billion over a decade. It has about $5 billion set aside to pay the bill.

The so-called “other post-employment benefits” liability was disclosed in New York’s comprehensive annual financial report released by the city comptroller’s office Wednesday. The city’s $98 billion unfunded liability for retiree health care exceeds the city’s $93 billion of bond debt and $48 billion pension-fund shortfall.

“The numbers are huge,” said Maria Doulis, a vice president at the Citizens Budget Commission, a budget watchdog group funded by the business community. “If you’re looking at the big three liabilities, this is the one that’s problematic, because there’s nothing set aside to address this and there’s absolutely no strategy on the part of the city.”

New York, the most populous U.S. city, has almost 300,000 current employees and is responsible for more than 230,000 retirees and their beneficiaries. City employees with 10 years of service qualify for free retiree health care.

The city’s post-employment benefits include health insurance, Medicare Part B reimbursements, and welfare fund contributions. Medicare Part B covers doctors’ services that are received from a federally approved facility or a medical practice. Welfare funds are administered by unions and provide supplemental benefits such as prescription drug, vision and dental coverage.

New York City should address its retiree health-care costs by requiring beneficiaries to share the cost of premiums for health insurance, eliminating the reimbursement for Medicare Part B and reducing contributions to the welfare funds, according to the CBC.

“Forget the private sector, this free retiree health insurance is not a benefit offered in the public sector,” said Doulis. “They’re not taking up that challenge. Limiting the growth and cost of retiree health insurance has not been on the agenda.”

Unlike debt, which is limited by statute, nothing restricts the level of retiree health liabilities.

Money set aside for retiree health benefits has been used as a rainy-day fund by mayors during times of fiscal stress, said Doulis. The $5 billion the city currently has set aside is projected to last until 2026. After that, the city will fund benefits on a pay-as-you go basis. The city paid $2.6 billion in retiree health benefits last year.

Let’s look at the highlights:

“The city’s $98 billion unfunded liability for retiree health care exceeds the city’s $93 billion of bond debt and $48 billion pension-fund shortfall.” Which means the retiree health care deficit is in addition to the pension shortfall. These are separate problems totalling nearly $150 billion – for one city.

NYC’s retiree health care unfunded liability rose by $40 billion in the past decade. But, “It has about $5 billion set aside to pay the bill.” So two years of just the increase in this liability wipes out the money on hand to pay it. That sounds like a cash flow rather than an accounting issue.

“New York … has almost 300,000 current employees and is responsible for more than 230,000 retirees and their beneficiaries.” There must be a ratio of employees to retirees where the numbers stop working and the system breaks down. 1-to-1, which NYC is approaching, has to be near that boundary.

“City employees with 10 years of service qualify for free retiree health care.” That has to be a typo, because if it’s not, public sector workers have cut themselves a deal that we in the private sector can only dream of. Historians will have a field day with this one.

The point? While Chicago and California hog the “unfunded pension liability” spotlight, it turns out that good old New York City has quietly been accumulating unfunded liabilities sufficient to make them members in good standing of the “imminent bankruptcy” club.

 

Emigrate While You Still Can

21 thoughts on "New York City Joins The “Imminent Bankruptcy” Club"

  1. WE now have Democrat candidates for POTUS who want to run the USA as NYC has been run. And the GOP RINOs are not much different. WE may be on the verge of the Great Depression-Version 2, and the cries for socialism to solve the problem will be even louder.

  2. “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money”. (Alexis de Tocqueville)

  3. Never bail out cities, states, or corporations. Suffer the pain of their fall which, regrettably, will result in personal hardship and loss of life. A bailout will simply postpone and magnify the loss of life and hardship.
    …you meanie; you want grandma to starve. No, confiscating from the public in order to supplant her family’s duty to save one grandma now, will result in the demise of a hundred later.

  4. The only reason liberalism has survived this long is they keep moving the goal posts. Trump needs to punish and withhold federal dollars to sanctuary cities and to any city that does not follow the rule of law, aka, any blue city. Game, set, match.

  5. We Won’t bail out another Democrat Rundown City.. They made their bedbug ridden cots, Now they can sleep ion them.

  6. No doubt some Federal Judge will allow the individuals on NYC pensions to draw from Social Security when they go bankrupt. Then another Federal Judge will allow illegals that are in the US and over 65 to draw from Social Security. Then another Federal Judge will allow people not US citizens living in foreign countries to draw from Social Security. Its free money because its someone else’s and these people need it more than the people who paid into it.

    1. It’s of interest to note that The CITY OF NEW YORK is, like Washington D.C., a city state separate from the other 50 U.S. states. Like D.C. it issues it’s own Birth Certificates under the “City of New York” – NOT the STATE of New York. So apparently it functions as a world state under the auspices of the U.N. If this is so should not the U.N be bailing them out not the U.S. taxpayers???

  7. It’s a real simple deal – either fund retiree benefits or wait until the pension fund collapses. The latter has happened in smaller municipalities, usually with a municipal bankruptcy. Pension benefits end up being slashed by 50% or more. It won’t affect only future retirees. Some poor folk that worked 30-40 years as a city worker ended up losing 75% of their pension after retirement. That’s gotta hurt.

    1. I mostly get up to $20,000-$21,000 a month using the internet. After doing work so wholeheartedly, I ended up losing my job in my company where I have given many years. I really needed a reliable income source. I am not into “get rich overnight” offers you see all around the net. Those are all kind of ponzi network marketing schemes where you are required to first make interested customers and then sell a product to friends and family members or any person so that they will probably be in your team. Internet based work has many benefits like I am usually home with my family and can really enjoy a lot of leisure time and go out for family trips. Here’s the most convenient way to start >>> https://looksroy.tumblr.com

    2. I actually gain almost $24,000-$25,000 each month online. I lost my job after doing work for the same organization for several years, I wanted trusted earnings. I was not thinking about the “get rich overnight” packages you can see all over the net. Those are usually mlm programs or stuff in which you have to sell to your friends and family. The best part of working on line is that I am always home with the little kids and also I easily go out on family vacation for long time. Honestly,it is actually easier than you would think. I got the instructions kit and within a month I was making over $4,000 each month. You don’t need to be technical, but you should know how to use the internet. If you can fill forms and browse web sites, you can do it quite easily, You don’t even have to sell anything. It’s as easy as being on any search engine like google or doing copy paste job. Here’s what I do https://intdart.tumblr.com

  8. There will be some kind of nationalization of public pension (and unfunded associated benefit) debt sometime relatively soon. Whether any private plans get tossed in depends on the political pull of those on the hook, I suppose. Having a seat on the PBGC Board might be a good way to solicit bribes….

    First we will see Mrs. McGillicuddy opening a can of cat food while President Trump (or whoever is appointed to the role of bad guy. And it WILL be a man. Likely a white man) eats caviar. Then an appeal to All Americans, then a scheme to issue a new sort of bond, proceeds to be distributed to the several States for pension funding. THe initial funding for the bonds will be private pension, IRA, 401K, Roth and other savings platforms. Throw 529 in there too. The former owners of those accounts will be issued some kind of bond or IOU (bearing interest, of course) that will purport to guarantee them a nice return in trade for their “participation in the job to Save Retirement and Keep the World Safe For Democracy.

    The plan will fail. The politicians and top-shelf bureaucrats will do fine behind walls, and everyone else wil be more screwed than they were before. Pensions will not be paid with anything like the value promised. The only questions are whether the people will be able to figure out who screwed them, and how mad they will get about it.

    Now you begin to understand why there is so much interest in getting rid of the 2nd Amendment, and making it very difficult to keep or bear arms or ammo….

  9. USA population
    1970: 205 million
    2017: 325 million

    We imported 100 million mostly low-skilled immigrants to save our pensions and social security system. Evidently our retirement systems are all headed to zero anyway. So that didn’t work.

Leave a Reply

Your email address will not be published. Required fields are marked *


Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.



Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.