Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 11:25 AM   #41
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
Re: I'm watching Frontline now and am already POed!!

cool; I didn't know that you could actually invest more than the limit, and just not have the overage deferred.

If it's not being deferred though, is there really any advantage into putting it into your 401k, versus just putting it directly into mutual funds?
__________________

__________________
Andre1969 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 11:30 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by ronin
The main purpose of the media is to deliver viewers to the advertisers, not to provide accurate, unbiased, in-depth analysis of the issues
Sadly, it seems that you're dead on with that comment.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 11:30 AM   #43
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 283
Re: I'm watching Frontline now and am already POed!!

I watched the Frontline presentation - what left me simply amazed was the deliberate-ness (if that is a word) of the United management (I'll refer to them as leaches from now on) over a period of 3-4 years to serially extract wage concessions, other benefit reductions (including health care), and work rules while threatening bankruptcy... and then still stealing the pension fund with the intention of retaining a few desperate employees to actually run the airline. *Any company loyalty must be completely gone now. *The leaches could then extract their bonuses from the formerly-pension funds to make sure there was nothing left.

I remain POed with C-T

JohnP
__________________
Dad's Dream; to have enough money someday to live the kind of life my wife and kids do...
Life is what happens while you are making other plans... John Lennon...
the more you look, the more you see...
JohnP is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 11:32 AM   #44
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Re: I'm watching Frontline now and am already POed!!

Per delivering viewers to the advertisers as their mission...

hopefully PBS is somewhat above that. They do have some commercials between programs however it is not as blatant or as annoying as it is with commercial stations.

John P:

United did not and cannot by law steal the pension fund. Their pension fund is independent of Uniteds management. What United did was to underfund the pension using the arcane but allowable pension funding rules. Bankruptcy then allowed them to stop altogether any additional pension funding.

There is quite a difference between what was done and what you posted.
__________________
MasterBlaster is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 11:56 AM   #45
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by donheff
We need systems that are designed to work for the average Joe.
I think we've tried that, we've seen how it works, and the PBGC would have to double premiums to keep it working.

For now, Average Joe better achieve 40 quarters of employment for Social Security eligibility.

Quote:
Originally Posted by donheff
I don't want to spend my twilight years surrounded by tired, defeated 80' something workers griping about how their companies/country failed them.
No problem-- they'll be at work. There won't be anyone in the lineup but us ER geezers and a few teenagers.

Quote:
Originally Posted by MasterBlaster
There is quite a difference between what was done and what you posted.
While there may be quibbling over the methods, I don't think anyone is arguing over the results.

Companies treated their pension systems exactly as they were legally required to, no more and no less. Negotiators handed away a staggering burden of pension/healthcare costs to their future executives-- look at what happened/what's happening to the steel & auto industries. Then those companies treated the Chapter 11 process exactly as they were required to. No more, no less. The lawyers were paid what seems to be a handsome amount, too, but I'll met Martha can attest that windfalls like this don't happen often enough to fund a lawyer's ER either.

Here's a classic-rock story: When Aerosmith was hitting it in the early '70s their agent was negotiating a record contract. It wasn't going well and at the end, to satisfy honor on both sides, the agent said "Why not give us rights to the master recordings after 25 years? C'mon, neither one of us will be here by then, the company won't care, and the master's'll probably be worthless anyway." 25 years later, guess what became Aerosmith's biggest & most-profitable possession. They're touring for fun, not money.

A NLRB negotiator used to explain that he brought both management & labor into the conference room, made them work for 12-18 hours, and spent all his time/effort on maneuvering them into a state of advanced sleep deprivation. Negotiating progress was secondary to wearing them out. After two or three days of this he'd be refreshed & relaxed (HE didn't stay there for 18 hours/day, THEY did) and they'd sign anything. Exhausted as they were, I doubt that anyone was worrying over the financial burdens of the pension/healthcare plans 25 years in the future while they were signing the package.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 12:01 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by Andre1969
cool; I didn't know that you could actually invest more than the limit, and just not have the overage deferred.

If it's not being deferred though, is there really any advantage into putting it into your 401k, versus just putting it directly into mutual funds?
No, there is no advantage IMHO. The disadvantages are that (1) penalty for early withdrawal; (2) withdrawals will be taxed at marginal income tax rate and not currently lower capital gains tax rate; (3) less choices among possible investments, especially low-cost ones.
__________________
LOL! is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 12:51 PM   #47
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
Re: I'm watching Frontline now and am already POed!!

I watched the FL show, and one thing was not dicussed. My understanding is that nothing was "taken" from the current employees pension funds. All the money that was currently in the pension plan prior to bankrupcy is still there. However, United has no obligation to add more monies in the future, so retirement benefits will be smaller. Is this correct? Maybe I misunderstand.

Also, why is everyone so concerned about the people who have pension that are being reduced? What about the 50% of workers (roughly) who have no pension and never had one? Why doesn't the govenment just give them one? I mean, I have no pension and I am having to bail out other people pensions (PBGC), so it seems fair enought to ask them to fund one for me!

BTW, I have no problem with the PBGC as long as it was self funded via contributions from pensions it insures. The minute it starts (started?) taking tax payer money is the minute it becomes welfare, just like flood insurance.
__________________
bbuzzard is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:00 PM   #48
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Re: I'm watching Frontline now and am already POed!!

People feel cheated because the implied contract/safety net is being yanked out from under them. Theoretically these people have foregone some of their wages so that their companies could fund their pensions. The breakdown of the promise leads to disillusion.

If you or others have no pension consider yourself somwhat fortunate. You can fund your own pension and won't have to rely on a dying company to keep its promise.

__________________
MasterBlaster is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:02 PM   #49
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 80
Re: I'm watching Frontline now and am already POed!!

I agree with MasterBlaster - why on earth were the companies allowed to so far underfund their pensions!!! *My DB pension plan is fully funded - well, at least it was until our Legislature decided to perhaps fold in the Minneapolis Teacher's pension fund, which is basically on the verge of default. *SUPPOSEDLY, this will not impact our DB plan in a negative way and we'll be helping out our fellow teachers (which I would love to do) but somehow it doesn't compute in my mind. *We also have a 403B which, as I've stated elsewhere on this board, has awful choices. *I learned a long time ago that if I was ever going to be FI and retire, that I was going to have to do it myself. *I am glad I learned it when I did (late, but hopefully not too late!!). *Hope others don't have to learn this the hard way.

__________________
SolidA is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:06 PM   #50
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 80
Re: I'm watching Frontline now and am already POed!!

oh, also, could someone please explain to me how the poor "deer in the headlight" guy from FI last night could decide to retire right after the market crash (lost more than 50% of the $100K that was in his account), THEN decide to take full distribution (YIKES!!!) and have to pay taxes - and end up with around $20K to retire with - and STILL DECIDE TO RETIRE, thinking he had enough money! I feel for the poor guy and his wife, but I cannot fathom the line of thinking that went on. Did I miss something??
__________________
SolidA is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:27 PM   #51
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by setab
First, the statement that you have to pay for talent suggests that this person's "talent" is worth more than the lives of the people he helped screw.
He helped screw? Ok, which is better...

1. FREEZE pensions, cut pay, etc and keep 52K/80K jobs (oh yeah, and hire a talented manager who happens to want to earn a market rate salary for the job)

2. buy cut rate management and lose ALL of the jobs.

This was not a problem that Glen Tilton created, he was brought in to save UAL

__________________
saluki9 is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:37 PM   #52
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 1,375
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by SolidA
oh, also, could someone please explain to me how the poor "deer in the headlight" guy from FI last night could decide to retire right after the market crash... Did I miss something??
First off, 100 is the average IQ (nuff said-). Plus, most boomers never got any financial education from their parents, schooling, or work--I know I didn't (despite the fact that I worked at Lotus Devt Corp...but not in the spreadsheet division). We tend to forget about that here in FIRE-land where we have so many business degrees and management-level jobs, not to mention quite a few who got started investing with their parents or grandparents. I got stock options that panned out, so I had my share of good luck, too. Not everyone is as smart, or lucky--or good-lookin'--as we are .
__________________
You can't always get what you want, but if you try sometimes, you might find you get what you need.
astromeria is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:45 PM   #53
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
Re: I'm watching Frontline now and am already POed!!

Another thing, regardless of your income, if you save x% for y years, you will z% of your final salary when you retire.

For instance, let's suppose that someone making $100k/year saved $15k/year (15% of salary) for 30 years and ended with $1,700,000 including investment returns (8% return). Thus, you end up with about 17 times your salary. This would make a very reasonable retirement.

If you made 20k/year, saved 15% (3k/year) for 30 years, you would end up with $340,000, or 17 times your salary. This would make a very reaonsble retirement. yes, you have only 20% of the other guy, but this is what you have been living on so it would be normal.

Considering that SS will replace ballpark 50% of the second guys income, and ballpark 15% of the first guys, I think you could argue that the second has a better retirement plan. Not to mention that the second guy will almost certainly get SS, while the first guy will probably have his "windfall" taxed to pay the second guys SS.

401K work for anyone who wants to use them and is willing to invest a little time. OTOH, I admit they do not work for most people because they do not fall into either of these categories. Maybe we could have a split system. I do not want a pension.
__________________
bbuzzard is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 01:52 PM   #54
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by bbuzzard
Another thing, regardless of your income, if you save x% for y years, you will z% of your final
If you made 20k/year, saved 15% (3k/year) for 30 years, you would end up with $340,000, or 17 times your salary. This would make a very reaonsble retirement. yes, you have only 20% of the other guy, but this is what you have been living on so it would be normal.
The problem is that it doesn't work that way.* You don't make $20,000 for 30 years.* You make $5,000 for a few years, $6,000, etc and end up the last few years at $20,000.* Twenty thousand dollars thirty years ago was a lot of money.* In 1976 I was making a couple bucks an hour.* Inflation.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 02:04 PM   #55
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 3,624
Re: I'm watching Frontline now and am already POed!!

The thing that disturbs me through out most of this thread, and others, that sometime appear here, is an undercurrent that the Government should do something to take care of the people. And, given enough encouragement, they are more than willing to do something. Only thing is that it usually cost three times more than it should, makes the politicians richer, and really does not solve the problem.

Where were the United employees and unions when management was under funding the pension plan? What responsibility do they bare for the bankruptcy and the under funded pension accounts? If what I learned in school is still true, business must produce a return on investment. It appears United employees could have their pay raises or fund the pension plan. Could it be United was just doing what regular folks are doing. Funding current goodies and worrying about retirement at a latter date? Big pay raises, and a promise of large retirements, a situation both employees and unions were more than happy to go along with.

A fair question is that of Senior Executive pay. How much is too much? How many golden parachutes were given out in the United bankruptcy. The Frontline report was a hatchet job, pure and simple!!! It was designed to bring rancor against management and what Frontline considers the Rich. More class warfare. It used the retirement issue to fan these fires and as such did little to further the cause of increased savings for retirement. In fact this thing could have been funded by the DNC!
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 02:08 PM   #56
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 283
Re: I'm watching Frontline now and am already POed!!

MasterBlaster - I think I may have a disconnect with respect to the Pension Fund, but answer a question for me, please.

If the United Pension Fund was not absorbed by United, then why did United go to Chapter 11 to get out from underneath it? *It seems to me that United, Delphi, and lots of other companies could just continue to non-fund the Pension Fund for the rest of eternity and they could accomplish the same objective without Chapter 11 and paying the army of lawyers and bonuses to management...

JohnP
__________________
Dad's Dream; to have enough money someday to live the kind of life my wife and kids do...
Life is what happens while you are making other plans... John Lennon...
the more you look, the more you see...
JohnP is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 02:12 PM   #57
Recycles dryer sheets
 
Join Date: Dec 2004
Posts: 273
Re: I'm watching Frontline now and am already POed!!

I started working for a company when I was 21. You had to be there 5 years before you were vested in the pension plan. When I turned 25 they changed the rules to 1 year for vesting. When I turned 36 they started a 401k and dropped the defined benefit. I contributed the max(15% of salary) to the 401k. When I quit a couple years later I had to decide where to roll over my pension as I only had $4k in it (we were unable to make contributions when it was available). My 401k had grown to $70k in 3-4 years.

My point being, to get from here to there, you have to know where there is. I worked with 4 or 5 guys who retired thinking $100k was going to go a long way.

I know, their pension plan sucked and I knew at the time of dropping the pension that it was the companies way of shifting the burden over to the employee.

When I left, employee contribution rates were averaging 3%. Most employees were afraid of the stock market so you had 30-40 year olds putting 70-80% of their retirement savings in cash and bonds.

I owe my investing insights to Jane Bryant Quinn. She made reading about a stodgy subject interesting.

I owe my continuing interest in financials to the contributors to this board.

thanks guys.
__________________
time flies like an arrow, fruit flies like a banana
larry is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 03:28 PM   #58
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Re: I'm watching Frontline now and am already POed!!

JohnP:

United was contractually obligated and legally required to fund their pension to pay what they had promised their employees. Since paying that amount was bankrupting the company they felt that they had no choice. You need to think about the pension fund being in two parts. The first part is the portion of promised pensions that were covered by what was in the fund. That's the part that is not owned by United. The second part is what needs to be paid into the fund to actually acheive the payouts that were promised. Since they had grossly underfunded the second part and the business was losing gobs of money management felt that they needed to reorganize under Chapet 11. There was no way under the old company that they could ever get the pension fully funded and live up to their promises.

So to answer your question directly... Could the old United just have decided to not bring the pension plan up to a fully funded level. The answer is no... They were legally required to fund the pension to the level of their promised payouts.

Those employees are screwed either way. Bankrupcy disolution means they lose their job and the non-funded part of their pensions. A chapter 11 reorganization means that they at least have a job and the enterprise could continue.
__________________
MasterBlaster is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 03:56 PM   #59
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 927
Re: I'm watching Frontline now and am already POed!!

Quote:
Per the Big company (eg. United) reniging on their pension promises. Those promises, if kept, would have forced United out of business. How would that serve the employees/retirees ? One could make the argument that cutting pensions and benefits was in the best interests for most of Uniteds employees. The management and their proxies at those big companies will always get their big cut. It's only a prosperous company that can deliver good things to employees and retirees.
If it's the case that the pension was bankrupting United, then it makes sense that they had to get out from under their obligations in some way.

What I don't get is why the monies saved are distributed among non-employees -- executives, lawyers, etc. Why couldn't they give employees shares in the NEW, post-bankruptcy United Corporation, so that if the employees' givebacks restored the company to health, they'd share in the benefits?

It couldn't be because they didn't WANT to reward or thank employees for the sacrifice, could it?

But what do I know... apart from the fact that I work for Megacorp, that they've frozen the pension, and that they're in seemingly excellent financial health.
__________________
Caroline is offline   Reply With Quote
Re: I'm watching Frontline now and am already POed!!
Old 05-17-2006, 03:58 PM   #60
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
Re: I'm watching Frontline now and am already POed!!

Quote:
Originally Posted by Martha
The problem is that it doesn't work that way. You don't make $20,000 for 30 years. You make $5,000 for a few years, $6,000, etc and end up the last few years at $20,000. Twenty thousand dollars thirty years ago was a lot of money. In 1976 I was making a couple bucks an hour. Inflation.
The point is still the same. If everyone saves the same percentage of their salary, then they will have the same perecntage of their final salary at the end of their career. Thus, you ability to retire on a 401k is not a function of your absolute salary, but only a function fo your willingness to save and your ability to invest reasonably.
__________________

__________________
bbuzzard is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 10:24 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.