Good riddance to pensions

[Gone4Good]

Corporate pensions are an unstable, unfair and economically perverse means of paying for retirement.


This phenomenon [companies like IBM freezing pension plans], along with the more dramatic cases of companies going bankrupt and defaulting on existing pension commitments (think United Airlines), has gotten tons of press, most of it of the "ain't it a shame" variety. But the real shame may be that we ever put so much faith in such an inherently unstable, unfair and economically perverse means of providing for retirement.

. . .

The problem with pension plans that promise a specific benefit in the future -- they amount, pension consultant Keith Ambachtsheer says, to a contract between current and future generations, and those future generations aren't represented at the bargaining table. As a result, they get stuck guaranteeing the retirement income of their elders while receiving nothing in return.

[haha]

Quote:

The problem with pension plans that promise a specific benefit in the future -- they amount, pension consultant Keith Ambachtsheer says, to a contract between current and future generations, and those future generations aren't represented at the bargaining table. As a result, they get stuck guaranteeing the retirement income of their elders while receiving nothing in return.

So what?
The whippersnappers wouldn't even exist if it weren't for all the hard time we put in in the bedroom.

Ha

[REWahoo]

Years, this article was posted earlier today here:

http://early-retirement.org/forums/i...97864#msg97864

[Gone4Good]

Quote:

Originally Posted by HaHa So what? The whippersnappers wouldn't even exist if it weren't for all the hard time we put in in the bedroom. Ha

And they'll remember you fondly when they pass the nursing home on their way to Starbucks.

[Gone4Good]

Quote:

Originally Posted by REWahoo! Years, this article was posted earlier today here: http://early-retirement.org/forums/i...97864#msg97864

Whoops.

[NYCGuy]

Yrs,

Please fix your quote. The Lovesong hasn't changed that much since we were in school.

Shall I part my hair behind? Do I dare to eat a peach?
I shall wear white flannel trousers, and walk upon the beach.
I have heard the mermaids singing, each to each.

[alphabet soup]

Hmmm... There's been a slew of articles in just the past several weeks about big, bad evil pensions. Most from right wing spin meisters.

I guess the Bushites are going for their "privatization" holy grail again this year, and the talking points are to prepare the sheeple.

Before you twentysomethings weaned on Ayn Rand start gloating, think long and hard about what's going to replace your pensions, social security and medicare.

Maybe 15% will prosper. The rest will be Walmart greeters or sleeping in cardboard cartons at 70 or so.

You really think Wall Street scumbags are going to give you a secure future?

[sgeeeee]

Quote:

Originally Posted by alphabet soup Hmmm... There's been a slew of articles in just the past several weeks about big, bad evil pensions. Most from right wing spin meisters. I guess the Bu****es are going for their "privatization" holy grail again this year, and the talking points are to prepare the sheeple. Before you twentysomethings weaned on Ayn Rand start gloating, think long and hard about what's going to replace your pensions, social security and medicare. Maybe 15% will prosper. The rest will be Walmart greeters or sleeping in cardboard cartons at 70 or so. You really think Wall Street scumbags are going to give you a secure future?

Yeah . . . this inherently unstable, unfair and economically perverse means of providing for retirement worked extremely well for over 60 years. And while this article claims that it is a contract between current and future generations, that is pure BS. Pensions are not designed like social security. They were a contract between corporations and existing employees. The corporations said that they would invest appropriately to pay part of the employee's compensation after they retired. Laws and regulations were developed to insure that companies really did invest approporiately. The corporations lobbied to allow themselves to invest less than they really needed to invest in the 80s and 90s, so now they don't want to pay. The corporate right spin-miesters modify history to justify another shift of wealth from the working class to themselves.

[youbet]

SG....

You've hit the nail on the head.* I agree.......* all private property must be seized by the government and held for the benefit of the citizens of the world!* When we unite and fight the capitalistic bast**ds, we will win!* They will regret the day they were born and the people will rule in common.* Keep up the fight comrade!

[sgeeeee]

Quote:

Originally Posted by youbet SG.... You've hit the nail on the head.* I agree.......* all private property must be seized by the government and held for the benefit of the citizens of the world!* When we unite and fight the capitalistic bast**ds, we will win!* They will regret the day they were born and the people will rule in common.* Keep up the fight comrade!

Out of curiosity, how do you think this comment relates to my post or anything I said?

The next generation is set to inherit trillions of $'s from this generation, pensions may not be the issue.

[Spanky]

Quote:

Originally Posted by Howard The next generation is set to inherit trillions of $'s from this generation, pensions may not be the issue.

How will these inheritances be distributed? How about those whose parents have nothing to inherit except debts?

[Jarhead*]

Quote:

Originally Posted by Spanky How will these inheritances be distributed? How about those whose parents have nothing to inherit except debts?

Spanky: Fortunantly, debts. aren't inheritable.

My mother and father, who raised a large family, married over 50 years, father worked as a logger until he was 70 died with a negative net worth. (Toughest S.0.B. I ever met in my life).

There's no such thing as a level playing field in life, but understanding that at an early age, will give you a leg-up.

Aside from that, being fortunate enough to live in the good old U.S.A., gives you an advantage over most of the world at large.

Jarhead, who appreciates, the bounties that have been handed me.

[kat]

Quote:

Originally Posted by Howard The next generation is set to inherit trillions of $'s from this generation, pensions may not be the issue.

I think you're probably right, Howard, though I also think most of us won't know it, with parents who didn't ever talk about it much. Dad (75) said something last year, so... next time I used dory36's FireCalc, I took out the very last car, and the last four years of my life planning(early 90's), and figured good ole Mom and Dad..... I'm nearly positive most of it will pass from me to the nieces and nephews and charity. I have four siblings and we're on the same page. By the way, I hate talking about this. But it does make ER planning easier, especially without a pension.

It will be so varied though. I see people not much younger than my parents working as cashiers.

[Eagle43]

Quote:

Originally Posted by Jarhead* Spanky:* Fortunantly, debts. aren't inheritable. My mother and father, who raised a large family, married over 50 years, father worked as a logger until he was 70 died with a negative net worth. (Toughest S.0.B. I ever met in my life). There's no such thing as a level playing field in life, but understanding that at an early age, will give you a leg-up. Aside from that, being fortunate enough to live in the good old U.S.A., gives you an advantage over most of the world at large. Jarhead, who appreciates, the bounties that have been handed me.

Me, too.* So lucky to have been born here.* Despite all the whining done by me and others, I believe we started off at 3rd base, compared with most of the rest of the world.* Not knocking them, mind you, just being positive about us.

[Spanky]

Quote:

Originally Posted by Eagle43 Me, too. So lucky to have been born here. Despite all the whining done by me and others, I believe we started off at 3rd base, compared with most of the rest of the world. Not knocking them, mind you, just being positive about us.

I agree. There were no retirement benefits in China or Vietnam from which we grew up. During their 'golden' years, most people had to rely completely on their kids for financial support. It's plausible that the situation may have changed or improved since we left in the late 60s.

[Dreamer]

I agree also. We are so very very lucky to have been born in the USA rather than in a third world country. We take so many things for granted here. I am also glad to be living now instead of 200-300 years ago!

Dreamer

[cute fuzzy bunny]

Well hold on now...I'll bet microsoft and cisco were pretty cheap stocks to buy back then...

[gratefuled]

"Old Age Pensions" are a benefit that workers a century and more ago were fighting and bleeding and dying for.* However you feel about modern organized labor, you have to enjoy the benefits its predecessor gave us: the 40-hour week idea, medical insurance, disability and unemployment compensation, weekends, paid holidays, improved job safety, etc.* These weren't gifts from enlightened management...they were spoils of war.

So anyone who says "good riddance to pensions" is endorsing a turn-back of the clock, and I hate that...it means a longer workweek, benefit cost-shifting to the employee, safety erosion...conditions that are generally more exploitative.

And now that FASB is changing the defined-benefit accounting rules so they'll show up on the balance sheet, watch for the rest of the iceberg to come crashing ashore in the next couple of years.* According to one estimate I read, if GM had to account for its retiree liability according to FASB's proposed rules, its net worth would be negative $19 billion.

Ed

[Nords]

Quote:

Originally Posted by gratefuled So anyone who says "good riddance to pensions" is endorsing a turn-back of the clock, and I hate that...it means a longer workweek, benefit cost-shifting to the employee, safety erosion...conditions that are generally more exploitative.

Totally disagree. First, unions will continue to exist as long as management gives them a purpose. When Scott Adams has to retire because no one reads Dilbert anymore, then the future of unions might be in jeopardy. But I doubt it.

Second, I'd rather have a commitment that's backed up by 401(k) assets, even if it's company stock, than one backed up by promises of executives (and their collusive union leaders) who won't be around in 20 years to live with the consequences.

I hope to be receiving a DBP for the next six or seven decades. Yet if the federal govt would give me a lump sum instead of the DBP, especially during the lowest interest rates in four decades, I'd take it in a flash.

Quote:

Originally Posted by gratefuled And now that FASB is changing the defined-benefit accounting rules so they'll show up on the balance sheet, watch for the rest of the iceberg to come crashing ashore in the next couple of years.

Well, doesn't this reveal a flaw of the DBP system? I think this is an improvement that's long overdue. If we had to use "funny acccounting" to handle the very real obligations to retirees, then why would the iceberg come crashing ashore when we treat it more realistically?

I think it's precisely this type of financial shenanigans that's put GM where it is today, that's about to put many other megacorps on the ropes, and that may even drive a few states or municipalities into severe problems. Realistic accounting based on assets and liabilities, not assumed rates of return, will keep management (and government) from selling out its employees and hiding the crime for decades.