Driverless cars may spell doom for State Pension obligations
As more and more headway is made in automation along the lines of robotics there seems to be a push on driverless cars as many point out that the pros will heavily outweigh the cons.
For the pros it really all comes down to fact that most accidents tend to occur due to the driver themselves as according to State Tech Magazine about 81 percent of all accidents are “the result of human error”.
Other pros for self-driving cars all seem to be tied to the to the specific technological advances the vehicles may have which Auto Insurance Center.com points out.
These pros range anywhere from less traffic as “self-driving cars participate in a behavior known as platooning, which would significantly improve traffic conditions and congestion” to freeing up the time of the commuter which will allow them to possibly be more productive while in the vehicle.
The cons on the other hand, which are also listed may not seem all that horrific as the biggest one seems to be the cost of implementing this technology nationwide.
Other cons listed also point to things like less litigation from attorneys who make a living from auto accidents to glaring problem that the auto insurance industry may take a huge hit.
According to Statista.com there are roughly 2.6 million employed by this industry in 2016 and a driverless nation will put a damper on that employment.
Where everyone, or at least our politicians should take note is not these listed pros and cons that are listed, but, from the fact that there will be one huge pro for drivers and huge con individual States which will also end up being a huge con for drivers.
With self-driving cars hitting the roads the ability to speed will cease to exist as the technology will cap what the vehicle can do in terms of actual speed.
This pro is fantastic for the owner as the idea of getting a speeding ticket will drop to nearly 0 percent as the ability to speed will be negated, but with this the pro the con should be fairly obvious as the individual states would see a sizeable cut in revenue from year to year.
According to Statistic Brian.com in 2015 there was over $6.2 billion spent on traffic tickets alone nationwide, which much of this cost going directly to the general fund of each state.
Why this becomes a problem is really simple: in a time where costs keep going up each State has an obligation to its public employees to not only pay for them but to also to fund their retirement as well and this specific obligation is taking on a life of its own.
No better example of where we may be headed as a nation is the state of New Jersey where the obligation to fund the retired public employees appears to be out of control as, according to NJ.com, the pension obligation rose to $49 billion in 2016.
Granted speeding tickets may not be much of dent into $49 billion, but when it comes to offsetting the certain pension obligations the state of New Jersey has it does help and where that help is specific to is the health coverage obligation its retired public employees.
In 2017 the state of New Jersey had a projected cost of about $382 million to insure its 236,000 retired public employees’ who were 65 years or older health costs in that year, while the state collected roughly $405 million in fines from speeding.
Thanks to revenue from just speeding tickets alone the state of New Jersey had what would appear to be adequate funds to pay it, but with the advent of driverless cars hitting the road ways in the not so distant future the distinct possibility of the state of New Jersey, as well as every other state, not meeting the promises to public employees may become a reality sooner than expected.
Thankfully the driverless car seems to be far off because like or not it would appear for now that states like New Jersey can’t afford them especially when it comes to past promises that were made when there was plenty of revenue to buy votes.
Dan McGrath is considered to be a leading authority on the subject of how health related costs in retirement will affect both retirement as well as the overall the financial planning process. Mr. McGrath has also authored the bestselling retirement planning book “What you don’t know about retirement will hurt you” as well as “Medicare: A Practical Guide to Understanding Your Health Coverage in Retirement”. http://www.jesterfinancial.com