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Re: The pension system destruction continues
Old 01-07-2006, 10:17 AM   #41
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Re: The pension system destruction continues

Quote:
Originally Posted by Spanky
If corporate responsibility is truly for the interests of shareholder, why do management give themselves exorbitant compensation package and pension? Yes, it's "every man for themselves" - I tend to forget. To improve the bottom line, management would get rid of employees and forefit pension obligations but give them a big raise for cost cutting while proclaiming that they are doing it for the interest of the shareholders.
Read Bogle's book, the quick answer is little or no governance by board of directors.
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Re: The pension system destruction continues
Old 01-07-2006, 10:19 AM   #42
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Re: The pension system destruction continues

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Originally Posted by Eagle43
Bingo.* And it's not up to the government, either.* It's up to you.
Eagle 43: *Yep. *That's exactly what I've tried to
convey to my adult children, when they (once in a while) complain about something not being fair. *"Yeah, I know, dad, Fair is where they have Ferris Wheels". (They love my snappy solution!) *Be that as it may, the image you see in the mirror while shaving, (Or in Nords case, pony-tail adjusting), is in the final analysis, the only one you can count on to take care of your family.

Jarhead, who agrees with ReWahoo, that Texas is the best college football team in the country.



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Re: The pension system destruction continues
Old 01-07-2006, 01:57 PM   #43
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Re: The pension system destruction continues

I do
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Re: The pension system destruction continues
Old 01-07-2006, 01:59 PM   #44
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Re: The pension system destruction continues

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Originally Posted by WhodaThunkit
All this says is that a DB pension is back loaded. That's why it hurts to be cut-off early!
That is the problem exactly. Many people, including some who have a DB plan don't understand this. In my case the greatest benifits come at 60 years old with at least 15 y service. At 55 it's not too bad 50% of what you get at 60. At 50 years old you get 23% and no medical. Most of the money comes at the end. Get layed off at 49. Oh well, too bad. You have a whole 12 years to try and make it up before social security.

I suspect the lack of empathy by some on the board indicates either that they don't have a DB plan or are already collecting it.

My advice for young people is not to believe in promises. Cash that you control is the answer.

I think some government oversite of this problem is called for. If the corps. short their employees while making billions there is a problem. If they are struggling to stay in business, then I can maybe see the need to reduce their expenses.

Consider if you bought an annuity and after a few years the insurance company said. Sorry we don't have enough to pay you any more. After all it was just a promise to pay if we could. I don't think many here would settle for that without fighting.
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Re: The pension system destruction continues
Old 01-07-2006, 03:21 PM   #45
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Re: The pension system destruction continues

DW is one of those mid-career IBM employees that stands to lose from the DB plan change.

Will the changes hurt us financially?* Yes.* Do I fault IBM for the changes?* No not really.

Employees retain their accrued DB plan benefits (DW will have a pension of about $35k/year starting at age 55) and they are improving the DC plans.* The former honors their obligations and the later gives employees ample opportunity to save for retirement.

They have always had a pretty good 401k with a company match and the value of DW's 401k is now greater than the cash value of her DB plan at age 55.* (I'm sorry but I just can't generate a lot of sympathy for those that decided to buy a new car or a bigger house rather than to contribute to the 401k from the start.)

So would I like to still have the DB plan?* Yes, most definitely, but overall they seem to have fullfilled their obligations to employees and shareholders and I suspect that that is better than risk following the steel and airline companies and perhaps the auto companies into bankruptcy.

I will say that the above comments are restricted to the IBM plan.* I don't know enough know about what other companies and institutions are doing to comment.

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Re: The pension system destruction continues
Old 01-07-2006, 03:50 PM   #46
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Re: The pension system destruction continues

Quote from: Nords on January 06, 2006, 02:48:50 PM

Compounding is compounding and the math works the same way whether it's a 401(k) or a DBP.

Quote:
Originally Posted by WhodaThunkit
I have no dog in this fight!*

But the thing about compounding is part of the problem.* When* a DB plan terminates, there is no more compounding.* Say your benefit is worth $10,000 per year in the year the plan terminates.* If you are 65 that year, you get the $10,000 per year.* OK.* If you are a younger person who is say 45 the year the the plan terminatres, and your benefit is $10K, you retire 20 years later at 65, but you still get $10,000 per year, with no adjustment for inflation.* So the middle-age guy (BTW -- I'm past middle age on the downhill side) really gets the shaft.* His 401K has grown only 20 years, and his DB is valued in 20-year-old currency.* You have a runt pension, and a runt 401K.
More than that. Compounding in a pension plan is not typically anything like compounding in other investments. The pension plans I was part of paid relativley insignificant benefits till an employee had over 20 years in. Then they ramped up fast. Payouts are almost always based on highest 3 to 5 years of earning -- which are almost always your final years. Stop accruing before you reach your peak earning years and the impact on the benefit is huge. If you had planned on spending 30 years at IBM, you were probably counting on a pension that would completely fund your lifestyle in retirement. Freeze that pension at the half-way point and you walk away with very little to show for it.
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Re: The pension system destruction continues
Old 01-07-2006, 03:54 PM   #47
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Re: The pension system destruction continues

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MB -- this is simply not true. *I remember the introduction of the 401K at IBM quite well (worked there at the time, and signed up for the max immediately). *When I hired in, there was no 401k!!!!
WhodaThnkit,

The word "always" may be incorrect or misleading.

This is what I know.

DW started in '84. *I just checked my records and have an end of year statement for their TDSP (401k) plan for '85.

I don't have any information prior to that but that is still at least 20 years of opportunities.

MB
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Re: The pension system destruction continues
Old 01-07-2006, 04:08 PM   #48
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Re: The pension system destruction continues

The trend is the US is clearly away from DB plans. Like it or not, we are going to see more, not less, of this in the near future.

When companies eliminate DB plans and replace them with DC plans, the worker always loses something. The company wouldn't be making the change if it were cost neutral. The company is clearly changing the compensation deal they made with their employee when (s)he was hired.

This administration is particularly inclined to let companies out from under pension obligations, so I expect over the next few years to see an acceleration of companies using legal manovers to get out of paying what they owe as well as cancellation of DB plans.

Is this good or bad? I would argue it's not good for the economy because the DC plans require that all workers become competent investment managers. While that may (or may not) be a reasonable thing to expect. It certainly isn't very efficient. Why should every coal miner, steel worker, school teacher, . . . have to spend part of their life learning about investment management? How does that improve the overall economy? Wouldn't it be more efficient if people could focus their energy on their own work?
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Re: The pension system destruction continues
Old 01-07-2006, 04:43 PM   #49
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Re: The pension system destruction continues

Bottom line

If a company can get the worker to work for no pension GREAT for the share holders.

If they should be able to CHANGE THE RULES for workers who have put in 20 25 30 35+ years of service, well my friends the government will let them get away with it and sorry to say the person is efed!
PERIOD!

You do not change the rules during the game.

Again my situation is one where I WAS TOLD AND REQUIRED TO JOIN IN the teacher pension annuity fund when I started my teaching carrer in the mid 1970s!

And today the rules are gonna change BECAUSE darn BAD AWFUL politicians elected by the dumb masses stole funds from a system that was WORKING!!!

America quite frankly STINKS! And CHINA will be the BIG DOG sooner than later, while we all try to stay alive working at mcDonalds at 80+ years of age!
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Re: The pension system destruction continues
Old 01-07-2006, 04:47 PM   #50
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Re: The pension system destruction continues

Quote:
Originally Posted by ((^+^)) SG

This administration is particularly inclined to let companies out from under pension obligations, so I expect over the next few years to see an acceleration of companies using legal manovers to get out of paying what they owe as well as cancellation of DB plans.
And the Klintonistas weren't also so inclined? *However, I do agree that pension plans are being dumped on the Pension Guarantee Board and taxpayers will apparently be stuck with the bills. *But that is due to laws that were initiated in and *passed by both houses of the US Congress. *
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Re: The pension system destruction continues
Old 01-07-2006, 04:51 PM   #51
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Re: The pension system destruction continues

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Originally Posted by newguy88

And today the rules are gonna change BECAUSE darn BAD AWFUL politicians elected by the dumb masses stole funds from a system that was WORKING!!!
You forgot the part of the story where the political hacks from the NEA and the state worker unions encouraged the state governments to put in place gold plated pension and retiree health benefits. There was no concern from the unions or the politicos about how to pay for this except I suppose everyone agreed to fleece the taxpayer. Now that the bill is coming due.....

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Re: The pension system destruction continues
Old 01-07-2006, 05:08 PM   #52
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Re: The pension system destruction continues

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Originally Posted by david-in-SC
You forgot the part of the story where the political hacks from the NEA and the state worker unions encouraged the state governments to put in place gold plated pension and retiree health benefits. There was no concern from the unions or the politicos about how to pay for this except I suppose everyone agreed to fleece the taxpayer. Now that the bill is coming due.....

Do you call 30,000 after working 30 years with medical bennies with heafty co pays GOLDEN??

By the way ef the darn unions they are as crooked as the politicians, and hey those UNION SHOPS!!! Have no choice but to join and the politicians have no b@lls to change that.

I will say this until I am blue in the face, I was given NO CHOICE when I SIGNED MY TEACHERS CONTRACT! I was TOLD by the STATE OF NJ I must contribute to the teacher pension annuity fund and have done so for almost 30 years, SORRY THEY MUST PAY the funds promised.
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Re: The pension system destruction continues
Old 01-07-2006, 05:33 PM   #53
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Re: The pension system destruction continues

As Bush and Company always say " F**** the employees, who do they think they are!!!"

As far as management getting better perks.....think again - I retired with 34 years and although my pension is still coming every day, my healthcare has gone to Texas!!!
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Re: The pension system destruction continues
Old 01-07-2006, 05:47 PM   #54
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Re: The pension system destruction continues

Lots of unfairness all around to be sure, but I think the worst will be when people with no pension or even 401k match--or even a 401k, no retirement medical benefits or even little or no health care subsidy during employment, are taxed to shore up other peoples' generous pensions. That's when my bleeding heart turns cold. :P

=astro, wondering if DH's teeny tiny pension from a compnay bought by a company bought by H-P will materialize when called for, or if the pension plan he's paying into at his state college will amount to anything
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Re: The pension system destruction continues
Old 01-07-2006, 05:56 PM   #55
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Re: The pension system destruction continues

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Originally Posted by Beststash
... I retired with 34 years and although my pension is still coming every day, my healthcare has gone to Texas!!!
Hey, that's good news for us Texans! Many of us have been looking for healthcare, but haven't been able to find it anywhere. Maybe JG's bringing it down with him.
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Re: The pension system destruction continues
Old 01-07-2006, 06:48 PM   #56
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Re: The pension system destruction continues

Quote:
Originally Posted by david-in-SC
And the Klintonistas weren't also so inclined? *However, I do agree that pension plans are being dumped on the Pension Guarantee Board and taxpayers will apparently be stuck with the bills. *But that is due to laws that were initiated in and *passed by both houses of the US Congress. *
Actually, I think most political observers believe that this administration and it's justice department takes a very different view of the pension obligation of companies from the Clinton administration. This observation about the current administation's view on pensions is not one I originated. It is pretty commonly stated in the mainstream press.
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Re: The pension system destruction continues
Old 01-07-2006, 09:52 PM   #57
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Re: The pension system destruction continues

Actually I appreciate you comments WhodaThunkit.* I was stating my opinion but if that opinion is based on faulty data please correct me. DW certainly does

Quote:
I would like to see the facts of the matter presented accurately, that's all.
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Re: The pension system destruction continues
Old 01-08-2006, 09:12 AM   #58
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Re: The pension system destruction continues

Quote:
Originally Posted by Lazarus
Consider if you bought an annuity and after a few years the insurance company said. Sorry we don't have enough to pay you any more. After all it was just a promise to pay if we could. I don't think many here would settle for that without fighting.
I actually think this will occur for some annuity providers if they take on too many boomer annuities and miss their projections. They will be allowed to go into Chapter 11 and off-load the annuities. Annuities do not have a safety-net so far as I know.
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Re: The pension system destruction continues
Old 01-08-2006, 09:37 AM   #59
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Re: The pension system destruction continues

Can't stuff the money in the mattress either. They can inflate it out of existence. Hard to know what to do to insure a safe retirement. The system would rather we work up untill our death and create more wealth for the board of directors.
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Re: The pension system destruction continues
Old 01-08-2006, 10:01 PM   #60
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Re: The pension system destruction continues

Quote:
Originally Posted by newguy88
Do you call 30,000 after working 30 years with medical bennies with heafty co pays GOLDEN??
Yes.

Ha
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