Italie, Irlande, Espagne, États et villes américaines des vraies solutions

De vrais solutions responsables qui ne sont pas à contre –courant


Toutes les solutions proposées par les différents pays comme l’Irlande, l’Italie, et l’Espagne ne sont que des solutions temporaires, car globalement tous les États providences ont trop emprunté, donc, les solutions ne sont qu’une simple prémisse de ce qui nous attend.

En plus, tous ces pays ont joui du 1 trillion de crédits que la BCE leur a accordés pour racheter leurs propres obligations, ce qui a réduit le choc, malheureusement, le Québec n’a pas ce privilège.

Par contre, ils sont assez responsables pour reconnaitre l’insolvabilité de telle promesse et d’avoir un minimum de décence de ne pas supporter ce fardeau exclusivement sur les générations futures.

Contrairement au rapport d’Amours qui insère un supplément de 4 milliards sur le dos du contribuable du privé, sans toucher aucunement aux retraites dorées qui ont été acquises par simple copinage entre les syndicats et les politiciens.

En Europe, systématiquement pour l’ensemble de la population, on a allongée l’âge de la retraite (typique de 65 à 67) et le nombre d’année nécessaire pour obtenir la pleine retraite, sans exception.

Tandis, que le rapport d’Amours dans sa grande finesse, vous obligera à travailler jusqu’à 75 ans, ainsi ne traumatisant aucun groupe d’intérêts qui ont acquis des privilèges insolvables, du simple copinage de la pire espèce.


Impact of the reforms: pension entitlements, OECD

In other countries where there are conditions related to the number of years of contributions for retiring with full (actuarially unreduced) benefits before the normal pension age, the rules are generally stricter.

France is increasing the number of years to 42, while in Italy and Luxembourg, for example, the number is 40.

When pension age reaches 67 in Germany, full benefits from age 65 will only be available to those with 45 years’ contributions.


Italie


En Italie, il n’y a pas de différence entre les fonds de pension du privé et du public, tout le monde est à la même enseigne, au moins, ils n’ont pas créé une iniquité flagrante entre ceux qui créent la richesse et ceux qui la dépensent.

Donc, la réforme s’applique à tout le monde.


Europe opened the window for significant reform

The new budget bill included significant changes to the pension system.

From 2012, all workers will accrue pension rights in the contribution-based system, effectively eliminating the transition periods established in the 1990s.

The measures also include an increase in the minimum years of contributions and in the age needed to access a seniority pension, which in practice means that no worker will be able to retire on these pensions before 66 years of age from 2015.

The retirement age is increased to 66 years for men in 2012 while women’s retirement age will be progressively increased to reach 66 years in 2018. Finally, the uprating of pension benefits by inflation is suspended for 2012 and 2013.

Italy is a good example of how economic and political crises, in addition to pressure from the EU, can bring significant change in the area of pension policy.

The reforms initiated in the late 1990s and continued in 2011 have been a significant reconfiguration of the pension system from one in which pensions were based on earnings to one based on contributions.

For an employee with average earnings growth and 40 years of contributions, it has been estimated that their public pension would be reduced from representing around 70 per cent of their pre-retirement salary in the old system to around 56 per cent in the new one.

However, the new system could lead to even lower pensions for some individuals with an insufficient number of years of contributions who have spent relatively long periods of time unemployed.

This is because in the new system the pension paid is related to the total amount of contributions paid. With the unemployment rate hovering around 10 per cent of the workforce and prospects of low economic growth in upcoming years, it is likely that a significant number of current workers will receive a low pension in retirement. Also, some categories of workers like the self-employed, who typically make lower and interrupted contributions, could be worse off than workers with uninterrupted and higher contribution records.

While the Italian public pension system may have been saved from collapse thanks to recent reforms, there is a risk that future pensioners will receive much lower pensions than expected. (1)


Italy: Major Social Security Pension Reform Introduces Austerity Measures

In December 2011, a major pension reform was enacted, introducing emergency austerity measures that have modified the Italian state pension system in several ways.

KEY DETAILS

The major change in the pension system is a delayed retirement age:

Effective January 1, 2012, the new retirement age has been set at 66 for male employees; for female employees, the retirement age will gradually increase to age 66 by 2018.

The reform does not apply to employees who have met the pension eligibility requirements by December 31, 2011. The retirement age will rise according to actual increases in life expectancy published by the National Institute of Statistics. Starting in 2021, no workers will be able to retire before age 67.

The state pension benefit individuals receive is calculated according to how long they have been making contributions. There are three calculation schedules:

1.       Earnings-related system (retributivo): This calculation applies to those who, by December 31, 1995, had contributed for at least 18 years; the annuity is calculated as a percentage of salary through December 31, 2011, with a defined contribution arrangement for service from January 1, 2012.

2.       Pro rata system (misto): This applies to those with less than 18 years of contributions by December 31, 1995; the annuity is calculated using the earnings-related system until December 31, 1995, and the contribution-based method for all service after January 1, 1996.

3.       Contribution-based system (contributivo): This applies to all employees hired for the first time after January 1, 1996; pensions are calculated solely on the basis of contributions made during their working lives, up to a ceiling of (currently) €96,149 (US$119,099).

New minimum contribution qualifications for early retirement are:

Men: 42 years and one month in 2012, increasing to 42 years and six months beginning in 2014

Women: 41 years and one month in 2012, increasing to 41 years and six months beginning in 2014

If the employee draws an early retirement pension before the age of 60, a reduction of 2% of the total pension benefit will be applied for each year before age 60 is reached, while a reduction of 1% will be applied for each year between the ages of 60 and 62.

IMPLICATIONS FOR EMPLOYERS

The overall increase in retirement age will result in an increase in the length of employees' service, which will cost employers more for the most common defined benefit arrangements (e.g., long-service award, Trattamento di fine rapporto and other severance payment plans).

The value of the pension will be lower than under the previous system, making top-up/supplementary pension plans more important. (1)



Irlande

Workers should be forced to pay into pensions, says OECD

Public servants should move away from the current final salary pension scheme and all private sector workers should be forced to invest in private pensions under recommendations in a report on pension provision in Ireland.

In the most radical review of the Irish pension system to date, the OECD says the “simplest, less costly, and most effective way to increase coverage” is through the introduction of mandatory pension savings.

It also calls for a change in the “unequal treatment” of public and private sector workers, due largely to the prevalence of defined benefit, or final salary, schemes in the public sector compared to defined contribution schemes, where the employee carries the full investment risk, in the private sector.

While welcoming the recent changes in public sector pensions, the report says they are being introduced “only very slowly” and are unlikely to affect most public sector workers for a long time.

It also proposes that any new mandatory or auto enrolment scheme introduced for the private sector, which would be a defined contribution model, should also be extended to public servants.

It suggests that recent reforms and any new scheme should be not just for new entrants but also for existing public sector workers below a set cut-off age.(1)


Même durant le budget de 2009, elle avait déjà entamé de réduire les avantages de ces employés et leurs fonds de pension.

ADJUSTMENTS TO PUBLIC SERVICE PAY AND PENSIONS

In my Supplementary Budget, I announced my decision to have top level pay rates examined by the Review Body on Higher Remuneration in the Public Sector and benchmarked against those of other EU countries of comparable scale.

The Government has considered the recommendations of the Review Body and intends to apply reductions to all public servants in the higher pay bands including hospital consultants.

Based on the Review Body’s recommendations I propose to apply a reduction in pay of :

-          8 per cent for those with salaries from €125,000 to €165,000;

-          12 per cent for those earning between €165,000 to €200,000; and

-          15 per cent for those earning €200,000 or more.

These are permanent reductions which will be reflected in future pension entitlements.

The salary of the Taoiseach will be reduced by 20 per cent. This reduction, together with the pension levy means the Taoiseach’s salary will be cut by close to 30 per cent in total. Ministers and Secretaries General of Government Departments will take a pay cut of 15 per cent: an overall cut of close to 25 per cent when the pension levy is taken into account.

The Review Body concluded that the Constitution precluded them from recommending a reduction in judicial pay. Had they not been so precluded, they would have considered a downward adjustment. For the same reason the pension levy was not applied to the judiciary, though many judges have contributed an amount on a voluntary basis. I can inform the House that the Chief Justice and the Presidents of the Courts have urged all Judges to make the appropriate pension contribution. I will make provision in the Finance Bill to facilitate these payments.

Since the Review Body would have considered a reduction of judicial salaries, I have decided that there will be no increase in judges’ pay during the lifetime of this Government. Future Governments may choose, as in the past, to continue this course of action.

Those at the top will lead by example in this national downward readjustment of pay. Legislation to give effect to these substantial reductions in senior level pay will be published shortly. I want to thank the Review Body for their work. Their report will be published later this week.

It must be acknowledged that public servants have already made a substantial contribution to the necessary reduction in public expenditure.

-          The pension levy has reduced their pay by an average of nearly 7 per cent.

-          Their numbers have been reduced by the moratorium and the incentivised early retirement scheme and career breaks.

-          Like many workers they have forgone pay increases.

Unfortunately, more is required. The country can no longer afford a pay and pensions bill that accounts for more than a third of all current spending. Any reduction in the pay bill must be sustainable, must be applied in a progressive manner and must address the position beyond 2010.

As the House knows, there were lengthy negotiations with the public service unions in recent weeks. The Government wanted to achieve the necessary reductions by agreement and the unions earnestly sought to conclude a deal. I want to thank public service unions for accepting the need to reduce the public service pay bill and their constructive and strenuous efforts to reach an agreement on how this would be done. Regrettably, a deal was not possible.

The reductions we must now make do not reflect any lack of recognition of public servants or of the quality of the work they do for all of us. They are simply a matter of budgetary necessity in these extraordinarily difficult times.

Accordingly, the pay of public servants will be reduced with effect from 1 January 2010 as follows:

-          a reduction of 5 per cent on the first €30,000 of salary;

-          a reduction of 7½ per cent on the next €40,000 of salary; and

-          a reduction of 10 per cent on the next €55,000 of salary.

The reductions range from 5 per cent to 8 per cent in the case of salaries of public servants of up to €125,000.

Public Service Pension Reform

Exchequer spending on public service pensions will be over €2 billion in 2010.

As life expectancy improves and the population ages, this cost is set to rise. The State’s pensions bill will grow from about 5 per cent to 13 per cent of GDP by 2050, with two thirds of the increase in spending going on social welfare pensions and the remainder on public service pensions.

Cost increases on this scale cannot be ignored by a responsible Government determined to secure our economic future.

The Government has decided to introduce a new single pension scheme for all new entrants to the public service. The legislation will be introduced in 2010 and the scheme will be in place by the end of the year.

The new scheme will bring public service pension terms more in line with private sector norms.

Équivalent à une prestation à cotisation déterminée

 Among other things, it will change the calculation of benefits so that pensions are based on “career average” earnings rather than final salary on retirement as at present.

This will be more equitable than the present system which favours those with higher earnings later in their careers. The minimum pension age for new public servants will also be increased from 65 to 66 and then linked to increases in the state pension age.

More details of the main elements of the new scheme are given in the Summary of Budget Measures.

The link to earnings or ‘pay parity’ basis for post-retirement pension increases is a feature of Irish public service schemes.

The recent special report by the Comptroller and Auditor General estimated that the present actuarial cost of public service pensions is €108 billion. A change to a CPI basis for postretirement increases would reduce that cost to €87 billion, a reduction of 20 per cent. On average, pay increases have been significantly greater than increases in the CPI.

As part of the reform of public service pension arrangements, I will review the current arrangements and consider linking pensions to increases in the cost of living. Pending that review, I do not intend to apply the pay cuts I have already outlined to existing public service pensioners.

These are significant changes. The Government is determined to meet the immediate fiscal problems Ireland faces and, at the same time, to make far-reaching reforms for the future.



Espagne

Spain; 5 billion saved with pension reform decree

The government of Mariano Rajoy has approved a decree which will enable the state to save 5 billion euros a year once it comes into effect, ministry sources said.

Under the measure, which will be part of a sweeping pensions reform, the minimum period required to obtain a pension is raised to 35 years while the period necessary to force workers to retire is 33 years.

Ministry sources said that only measures concerning voluntary pre-pensioning will enable to save 70% of the system's costs.

The minimum contribution required to get a partial pension has increased from 30 to 33 years.

The decree is part of a general reform of pensions which came into effect last January which raised retirement age from 63 to 67. This reform will become effective in 2017. (1)


Spain plans deeper pension reform to meet EU demands

Spain will soon intensify pension reforms, possibly accelerating an increase in the retirement age and restricting index-linking of pension payouts to meet European Union demands to fix the country's troubled public finances, Spanish officials said.

Removing an automatic annual inflation adjustment for state pensions and speeding up the phasing in of a higher retirement age are long-standing European Union demands that Spain must meet in order to tap international aid to bring down borrowing costs and fix its stricken economy.

A senior Spanish government source told Reuters the reform, aimed at getting a grip on 100 billion euros a year in pension costs, or 10 percent of gross domestic product, would be presented to lawmakers in the next few weeks, possibly in early 2013.

The source said the government would propose steps to accelerate the increase in retirement age to 67 from 65, currently scheduled to take place over 15 years. Three other Spanish officials corroborated the plan.

 

The government is also considering removing the annual inflation-linked pension hike or, at least, applying conditions so that pensions do not rise when the economy is in recession or when the public deficit exceeds a certain level.

The four sources cautioned the reform was still being discussed at cabinet level -- although talks are at an advanced stage -- and that the only firm agreement so far was on a set of new rules to make early retirement more difficult, already flagged by the government in September.

The Socialist opposition is not expected to block the new set of rules, the sources said. Rajoy can in any case count on a strong majority in parliament to pass the law.

"The idea is to introduce more flexibility into the system. For instance, by making it possible not to adjust pension payments in the case of a recession or a deficit, or when you have liquidity tensions," the senior government source said.

"We also want to introduce a more automatic link between higher life expectancy and changes in the retirement age," the source said.

On commence à s’approcher du modèle suédois,
si la longévité augmente vos prestations diminuent.

Prime Minister Mariano Rajoy is considering when to request European aid that would trigger a European Central Bank bond-buying program to bring down borrowing costs that have soared in the euro zone debt crisis.

In order to meet tough EU-agreed deficit goals, Rajoy was forced last month to cancel the annual inflation adjustment for pensions, a move with a high political cost in a country where 20 percent of the population, or 9 million people, is retired.

Breaking a campaign pledge he opted to instead raise pensions by 1 percent in 2013, or 2 percent for the very lowest pensions. This way, the government saved around 3.8 billion euros that it would have had to spend to raise pensions in line with inflation of about 2.9 percent.

Discussions now center on breaking the principle of an inflation link more permanently by building in legislative caveats, rather than looking at it on an ad hoc basis.

UNSUSTAINABLE

One of the Spanish officials said the government was keen to make structural reforms to the pension system as it had become clear over recent years that it was not sustainable.

"Cutting the link between inflation and pensions is being discussed. It is the third year in a row we've had to take an 'extraordinary' decision (not to raise pensions) and the rule does not make much sense anymore," the official said on condition of anonymity.

Rajoy performed especially well among pensioners when he was elected in a landslide last year and his first move after taking office was to hike pensions after his predecessor Jose Luis Rodriguez Zapatero froze them in May 2010 when Spain entered the euro zone debt storm.

Zapatero also passed a law to add two years to the retirement age by 2027. Rajoy's People's Party, then in opposition, voted against the change.

Spain is by no means alone among European countries struggling to overhaul pension systems that have become unsustainable due to higher life expectancies.

But Spain's public pension system is particularly vulnerable because the country has the highest unemployment rate in the European Union at 25 percent, meaning fewer workers are making tax contributions to maintain it.

As the number of people contributing to the state pension system has fallen to its lowest level in a decade - more than 2 million Spaniards have lost their jobs and stopped paying into the system - Rajoy has been left with little choice.

The government tapped 4.4 billion euros from an insurance fund to make July and August payments to pensioners and last month passed a law to tap the pension reserve fund to ease liquidity tensions over the next two years.

EU DEMANDS

The reform plan is also a long-standing demand from the European Union. The International Monetary Fund and European Central Bank are also pushing Spain to sever the link between pensions and inflation.

The four Spanish officials said they were aware of the EU demands but insisted it was not the main factor that triggered the new reform.

However, a European official, also speaking on condition of anonymity, said the European Commission had insisted on the reform at recent regular meetings with the Spanish authorities.

"We have specific demands on measures to increase the retirement age. In July, the government announced a series of steps but it lacked details," the official said.

"We would welcome clear steps and details. For instance, increasing by one or two months every year the planned rise in the retirement age, fixing the minimum early retirement age at 63 instead of 61, implementing penalties for early retirement or installing an automatic revision of the retirement age linked to life expectancy," the official added.

He however said no specific demand had been formulated recently on delinking inflation and pensions because there were conflicting voices within the Commission on the issue.

The Commission recommended in a July report that Spain make its pension system more sustainable without specifying how.

In November, it said Spain had done enough to rein in its public finances in 2012 and 2013 but asked the country to spell out new economic reforms for 2014 and beyond by next February (1)


États américains ou villes américaines


Les États-Unis joui d’un privilège unique, ils peuvent imprimer de l’argent sans subir les foudres du marché, par contre, ce jeu est dangereux, car ils déstabilisent l’économie réelle (exemple compétitivité entre États-Unis et Canada) et crée de l’inflation.

Par contre, les États américains n’ayant pas la possibilité de faire des déficits d’opérations (dépenses d’épiceries) doivent attaquer le problème de l’insolvabilité des régimes de prestations déterminées, malheureusement, les actuaires ont surestimé (volontairement) les rendements depuis trop longtemps.

Les villes américaines ont la même problématique, par contre ils ne vont pas dans la dentelle, quand  le syndicat ne veut rien comprendre, la ville se met en faillite, et toutes les conditions de la retraite sont de nouveau renégociées, cette fois-ci en maintenant un équilibre entre les avantages de l’employé et la capacité de payer des contribuables.


State and Local Government Spending on Public Employee Retirement Systems

As states and cities continue to address the effects of the Great Recession, the cost of pension benefits for employees of state and local government remains a key point of discussion. On a nationwide basis, pension costs for state and local governments are roughly three percent of total spending.

Current pension spending levels, however, vary widely and are sufficient for some entities and insufficient for others.

In the wake of the 2008-09 market decline, over 40 states and many cities have taken steps to improve the financial condition of their retirement plans and to reduce costs.

Although some lawmakers have considered closing existing pension plans to new hires, most determined that this would increase—rather than reduce—costs,in particularly in the near-term.

Instead, states and cities have adjusted employee and employer contribution levels, restructured benefits, or both.

Ultimately, the degree of needed change in pension plan costs will depend largely on the funding history of the plan and the type and magnitude of recent reforms.

One study estimates that total required spending on pensions could consume as much as 13 percent of one state’s budget,iii due partly to past failures to adequately fund pension costs and assuming a five percent investment return. The chronic failure by some pension plan sponsors to pay required contributions results in greater future contributions to makeup the difference. (1)


Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith

Today a judge ruled that the city of Stockton California is indeed bankrupt and that the city acted in good faith. Creditors asked the judge to void the bankruptcy, saying the city could raise taxes instead.

I have been watching this story for a while. Here is some
background on the Stockton bankruptcy as reported by Arizona Central.

By outward appearances, Stockton, a city of nearly 300,000 on the Sacramento-San Joaquin River Delta, seemed in the mid-2000s to be emerging from decades of struggle.

After the city’s population grew by nearly 20 percent between 2000 and 2005 and real estate tripled in value, home prices plummeted 40 percent the following year before bottoming out at 70 percent.

Within two years, Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions and the most generous health care benefits in the state — coverage for life for all retirees plus a dependent no matter how long they had worked for the city.  

By 2009, the city began slashing its budget to stay afloat. The police department lost 25 percent of its 441 sworn officers and the fire department was cut by 30 percent. City staff was cut by 40 percent. The city general fund budget, now $155 million, has been cut by $90 million over three years.

The impacts were felt everywhere. Wells Fargo bank seized three parking garages when the city defaulted on the $32 million in bonds that financed them. Bond holders also seized the $40 million downtown high rise that was to become City Hall.

Last summer, the city began negotiating with creditors, a requirement before entering bankruptcy. Ten employee unions agreed to temporary wage and benefits cuts.

Retired employees have also been asked to pick up a larger share of health care premiums, closing a $540 million retiree health care cost liability.

But the holders of the biggest share of the debt were the companies that in 2007 insured nearly $165 million in pension bond obligations to allow the city a lower interest rate and make them stable for investors. They were unable to negotiate a deal and want the city to avoid bankruptcy, which would likely allow Stockton to avoid repaying the debts in full.

City Acted in Good Faith 

Today, Bloomberg reports a
Judge Decided City Acted in Good Faith, Creditors Didn’t
 

The judge in a trial over whether the city of Stockton, California, can stay in bankruptcy said he found that the city negotiated in good faith with its creditors, and that the creditors didn’t.

Creditors, including Assured Guaranty Corp. and Franklin Resources Inc. (BEN) had argued that Stockton didn’t qualify for bankruptcy because the city isn’t truly insolvent, and that its leaders didn’t negotiate a potential settlement in good faith.

Negotiation is a “two way street,” said U.S. Bankruptcy Judge Christopher M. Klein in Sacramento, addressing creditors who he said didn’t negotiate in good faith. “You cannot negotiate with a stone wall.” 

In the course of the hearing today, Klein has also said that the city’s witnesses were credible and that the city was “by any measure” insolvent when it filed for protection from creditors. 

The city is slated to stop paying for retiree health care on June 30 as part of a spending plan the City Council approved in June, citing a $417 million unfunded liability. The benefit had allowed workers employed as little as a month to receive city-paid health coverage for life, for both the employee and his or her spouse, Bob Deis, the city’s manager said.

Stockton’s unemployment rate was 18.7 percent in January, almost twice the state jobless rate of 9.8 percent, according to the California Employment Development Department. The national unemployment level that month was 7.9 percent, according to U.S. Labor Department data.

This was a good ruling. The city is of course bankrupt and taxpayers should not have to pay for it more than they already have.

Once again the main problem was untenable salaries for public unions and city workers. The housing crash simply brought the crisis to a head sooner
.

In addition to reduced healthcare benefits, the pension plan should be scrapped as well, but don't expect city officials to cut their own throats no matter how much they deserve it.


Source: Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith,
Mish Global Economict, April 01, 2013