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"underfunded pensions are the result of, well, decades of underfunding pensions" - This statement couldn't be further from the truth. Underfunded pensions are a result of 1) mismanagement of pensions and 2) the unsustainable nature of them (you should never "guarantee" anything). People need to take more responsibility for their own future well-being, and not rely on the support of others. If you want a "guarantee," you're going to have to accept a de minimis return.
People need to take more responsibility for their own future well-being, and not rely on the support of others. If you want a "guarantee," you're going to have to accept a de minimis return.
Agreed, Lewis Braham. 200%. I had to settle for a smaller (defined-benefit) pension for retiring early, but at least it rises each year by about 2%--- which is not guaranteed, either. The in-house rule is that the system must be 110% funded, in order to offer us retirees the raise. Ostensibly, in very good years, our raise can go higher, theoretically MUCH higher. But it's never going to be out of line with the general environment, anyhow.
It's the whole shtick about the undeserving poor and how they mooch from all of us deserving taxpayers, blah blah. Would be nice if the hostility went toward the undeserving rich.
"It is an opinion piece, and is highly biased toward unions and singles out Republicans."
@Maurice: It was a fairly detailed article: if it was so nonfactual as you would have us believe surely you could find a few specific examples for us. Your definition of "bias" seems to be simply any statement which makes you personally uncomfortable. As usual, your comments are short on facts and data and long on unsubstantiated opinion.
Noted above/previous: "underfunded pensions are the result of, well, decades of underfunding pensions" - This statement couldn't be further from the truth.
The bold part of this; is there a data base that could be provided by someone? Some days I'm just a fool for data. Thank you. Catch
I am aware the Kochs are libertarians but Maurice didn't say it singles out libertarians. He said it singles out Republicans which is a word not used in the article. The Problem with pensions is that boss's?politicians offered staff high pensions knowing the bill would not come in while they were still in office.If a pension has reasonable actuarial assumptions it should be possible to fund.
It is my understanding that many pensions have became underfunded because of the interest-return assumptions many companies used to calculated to show being fully funded or at least above government mandates.
If a company is telling it's retiree's, employees and the government agency that over-looks funding that the pension plan is fully funded, but they are using 8 or 9 or 10% or more in their calculations of future returns to justify their logic, well that is not sustainable.
Pension plans can say they are 100% funded when using unsustainable return estimates but probably more realistically at 60-80% (or less) funded using more reasonable return numbers like maybe 5-6% return. At least that was the logic we were given when the company I worked for changed there defined benefit on existing and future retirees after bankruptcy realignment.
People need to take more responsibility for their own future well-being, and not rely on the support of others. If you want a "guarantee," you're going to have to accept a de minimis return.
It is my understanding that many pensions have became underfunded because of the interest-return assumptions many companies used to calculated to show being fully funded or at least above government mandates.
If a company is telling it's retiree's, employees and the government agency that over-looks funding that the pension plan is fully funded, but they are using 8 or 9 or 10% or more in their calculations of future returns to justify their logic, well that is not sustainable.
Pension plans can say they are 100% funded when using unsustainable return estimates but probably more realistically at 60-80% (or less) funded using more reasonable return numbers like maybe 5-6% return. At least that was the logic we were given when the company I worked for changed there defined benefit on existing and future retirees after bankruptcy realignment.
8-10% is obviously a pipe dream. 5-7% likely doable, but when you're talking about trying to guarantee things one should be conservative. Any pension, IMO, should assume an annual rate of return of less than 5%.
8-10% is obviously a pipe dream. 5-7% likely doable, but when you're talking about trying to guarantee things one should be conservative. Any pension, IMO, should assume an annual rate of return of less than 5%.
Yes, and that's my point. Companies used unsustainable return estimates for years, and frankly the government agency that monitors this allowed them too.
Yes companies and public pensions made unsustainable estimates for their pension plans. So why this blame of the employees--public or private sector--for these unsustainable estimates, that they need to take "personal responsibility" for their employers' misdeeds? And an even better question, why did public and private pension plans make these unsustainable estimates in the first place? The reason is in the public sector is to underfund the pension and not spend any tax dollars funding it properly. Constant tales from right-wing politicos of "wasteful" and "irresponsible" public sector employees living supposedly high on the hog on pensions they spent their entire careers earning. In the private sector by underfunding the pension companies can divert more of their cash towards shareholders and senior management bonuses. Again, these "pie-in-the-sky" estimates were made by management intentionally with the whole point being not to put enough capital in the pensions. So why blame the employees for this? The whole goal has been to underfund pensions all along and ultimately force workers into lower cost 401k plans instead. Initially, when the 401k was first marketed in the 1980s the plan was to entice workers into them with corporate matching of their contributions, but even that is going away at many employers. And somehow we're to believe the switch is all to workers' benefit and that the pension plans' failure is all their fault. It isn't.
I don't believe it's the employers fault for pension failure, but the fact of the matter is that pensions have failed to hold up their end of the bargain, and I see no evidence that they will be sustainable in the future. The 401(k) is a great vehicle for retirement, and I'm not sure the comment about employers removing matching contributions is valid, at least that I've seen.
A side note that I believe is related, to some degree, is that most Americans live beyond their means. We go out to eat/drink, attend concerts/sporting events, but then complain that we can't save. I'm going to be blunt... This makes absolutely no sense.
Generally, everyone that participates in this forum is knowledgeable of investing, but another problem I believe to be at the roots of this is that we don't do a great job educating people on money. I know several people that have had access to matching contributions for 5+ years that haven't taken advantage of this (not once) instant 100% return. This just boggles my mind.
Everything's being downloaded upon the individual. The individual can take and claim and use all of the personal responsibility he/she possibly can for everything, but it will never be enough. COLLECTIVELY, more can be accomplished. Today, the wealthy operate as if to say: "I got mine, I hope you get yours." ("What? You mean your daddy didn't leave you a huge lump of sweaty money, like mine did for me? What a shame. I hope you get yours. Bye bye...") One of the two dominant parties which have locked-up the government between themselves has made it a mission to bust unions and anything collective, like traditional pensions. I just found out I'll be getting a 3.9% raise in my trad. pension, starting in July. It is possible because my former employer looks out for the collective common good of all those in the plan, both those still working and those retired.
"another problem I believe to be at the roots of this is that we don't do a great job educating people on money."
@JoJo26- I agree completely, and have been saying the same thing for at least fifty years now. People of our generation (some of us, at least) had the benefit of hearing the experiences of our parent's generation, who survived the 1929 depression. We grew up understanding that careless use of credit was a very bad thing... if you wanted something expensive, you saved up until you could pay for it. The one exception was a home mortgage.
I'm very happy to see that you have figured out the "game" at such an early age. Good luck to you!
@Crash: "I'm sorry, the number that you have dialed is not in service at this time. Please be sure that you have dialed correctly"... "I'm sorry, the number that you have dialed is not ...
@Maurice: So in your world an "opinion" is nonfactual and invalid simply because it is an opinion. Unless of course that opinion happens to be yours. Nice try. More absurd by the day.
>> suggest you scroll up to the top of the page where davidmoran posted. Read the contents of the link, and see if you can find the word "opinion". It seems you and the NY Times disagree.
Huh? The link says opinion, and the standing hed also says opinion, while the opinion piece itself is full of facts, sentence by sentence. You're talking about the Webber piece?
Comments
Regards,
Ted
https://politico.com/story/2018/02/25/supreme-court-public-unions-2018-midterms-423436
Why is it this "personal responsibility" jive is always thrown at ordinary citizens by elites but elites never have to follow the same rules?
@Maurice: It was a fairly detailed article: if it was so nonfactual as you would have us believe surely you could find a few specific examples for us. Your definition of "bias" seems to be simply any statement which makes you personally uncomfortable. As usual, your comments are short on facts and data and long on unsubstantiated opinion.
Noted above/previous:
"underfunded pensions are the result of, well, decades of underfunding pensions" - This statement couldn't be further from the truth.
The bold part of this; is there a data base that could be provided by someone?
Some days I'm just a fool for data.
Thank you.
Catch
The Problem with pensions is that boss's?politicians offered staff high pensions knowing the bill would not come in while they were still in office.If a pension has reasonable actuarial assumptions it should be possible to fund.
If a company is telling it's retiree's, employees and the government agency that over-looks funding that the pension plan is fully funded, but they are using 8 or 9 or 10% or more in their calculations of future returns to justify their logic, well that is not sustainable.
Pension plans can say they are 100% funded when using unsustainable return estimates but probably more realistically at 60-80% (or less) funded using more reasonable return numbers like maybe 5-6% return. At least that was the logic we were given when the company I worked for changed there defined benefit on existing and future retirees after bankruptcy realignment.
A side note that I believe is related, to some degree, is that most Americans live beyond their means. We go out to eat/drink, attend concerts/sporting events, but then complain that we can't save. I'm going to be blunt... This makes absolutely no sense.
Generally, everyone that participates in this forum is knowledgeable of investing, but another problem I believe to be at the roots of this is that we don't do a great job educating people on money. I know several people that have had access to matching contributions for 5+ years that haven't taken advantage of this (not once) instant 100% return. This just boggles my mind.
@JoJo26- I agree completely, and have been saying the same thing for at least fifty years now. People of our generation (some of us, at least) had the benefit of hearing the experiences of our parent's generation, who survived the 1929 depression. We grew up understanding that careless use of credit was a very bad thing... if you wanted something expensive, you saved up until you could pay for it. The one exception was a home mortgage.
I'm very happy to see that you have figured out the "game" at such an early age. Good luck to you!
@Crash: "I'm sorry, the number that you have dialed is not in service at this time. Please be sure that you have dialed correctly"... "I'm sorry, the number that you have dialed is not ...
>> suggest you scroll up to the top of the page where davidmoran posted. Read the contents of the link, and see if you can find the word "opinion". It seems you and the NY Times disagree.
Huh? The link says opinion, and the standing hed also says opinion, while the opinion piece itself is full of facts, sentence by sentence. You're talking about the Webber piece?