I'd be curious to know if you read - and / or how far you read - into the comments thread under the Schultz piece. There are a number of terms and concepts that are important to clearly define here, such as defined contributions and defined benefits. In a nutshell, the important principle is that a profit-making organization is not going to set up a situation where it says to a new employee "Here is the table that tells you exactly what we guarantee you will get per month from the time you retire from here." That would entail just letting an ever-accumulating pile of capital sit in some no-risk account.
That's my way of putting it. I will now include the views of one commentere: Wow, reading Ms. Schultz's article and all of these comments, it's remarkable how few know the real truth. It will be hard to tell everyone the whole truth but: 1) I'm in the business and one of the hardest things to discuss with someone is retirement - until it's too late for them; 2) Corporations act in their long term self interest (like everyone else) and defined benefit plans are not valued by employees thus the move to cash balance and 401(k); 3) This move hurt lots of those long term single employer employees in their late 40's and 50's who were expecting a pension - they should have saved money outside the retirement plan; 4) The government was instrumental in underfunding by OUTLAWING overfunding in the 80's and threatening to tax 100% of excess assets - guess what, it's impossible to be perfect and no one wants their money confiscated so - underfunding! 5) All of this led to using these funds in any way possible so the governmant did not get them; 6) The employer IS STILL ON THE HOOK for promised benefits - even in an underfunded plan; 7) My final comment is that ERISA was enacted after a very few plans went belly up - usually with their employers. We've gotten all the rest of this due to this overreaction AND natural changes in benefits due to EMPLOYEE DESIRES. For Ms. Schultz to mention none of this in her article means I don't have to read her book!
Oh sure, the employer is still on the hook, but many have not followed through on their contracts (not just promises). And there's that hateful"they should have saved money outside their retirement plan" crap, because, who says they didn't? How much of your ire that is directed at those who chose to work for someone else and now have been shafted by :"Da Man" is really envy because you and your spouse for life chose not to? Have you saved enough money for retirement? Are you going to decline to receive your OASI benefits at your chosen age on moral grounds?
Oh well, you can't read everything. The Wall Street Journal sees fit to have her on their staff though. I will read it as soon as it becomes available, either in print or electronically(which is a great great service and excellent investment and return on the meager amount of my income tax obligation that continues to give back immeasurably) at the 2 local public libraries I belong to in my two current domiciles which I certainly support and am even in favor of a certain measure of federal funding for which has been occurring for over 5 decades now and helped foster worldwide inter-library communication and resource sharing, continued intellectual freedom and open access to information for all. By the way, the Pubs appear to have several near dunces running for that big job in Washington. That scares me, if not you.
If these are successful Americans here, tax the piss out of them, time to get back what they're legally stealing from us.
ReplyDeletehttp://www.miamiherald.com/2011/09/17/2412472/municipal-pensions-a-bonanza-for.html
http://online.wsj.com/article/SB10001424053111903532804576566862041674794.html?google_editors_picks=true
I'd be curious to know if you read - and / or how far you read - into the comments thread under the Schultz piece. There are a number of terms and concepts that are important to clearly define here, such as defined contributions and defined benefits. In a nutshell, the important principle is that a profit-making organization is not going to set up a situation where it says to a new employee "Here is the table that tells you exactly what we guarantee you will get per month from the time you retire from here." That would entail just letting an ever-accumulating pile of capital sit in some no-risk account.
ReplyDeleteThat's my way of putting it. I will now include the views of one commentere:
Wow, reading Ms. Schultz's article and all of these comments, it's remarkable how few know the real truth. It will be hard to tell everyone the whole truth but:
1) I'm in the business and one of the hardest things to discuss with someone is retirement - until it's too late for them;
2) Corporations act in their long term self interest (like everyone else) and defined benefit plans are not valued by employees thus the move to cash balance and 401(k);
3) This move hurt lots of those long term single employer employees in their late 40's and 50's who were expecting a pension - they should have saved money outside the retirement plan;
4) The government was instrumental in underfunding by OUTLAWING overfunding in the 80's and threatening to tax 100% of excess assets - guess what, it's impossible to be perfect and no one wants their money confiscated so - underfunding!
5) All of this led to using these funds in any way possible so the governmant did not get them;
6) The employer IS STILL ON THE HOOK for promised benefits - even in an underfunded plan;
7) My final comment is that ERISA was enacted after a very few plans went belly up - usually with their employers. We've gotten all the rest of this due to this overreaction AND natural changes in benefits due to EMPLOYEE DESIRES.
For Ms. Schultz to mention none of this in her article means I don't have to read her book!
Jim Nolan
Oh sure, the employer is still on the hook, but many have not followed through on their contracts (not just promises). And there's that hateful"they should have saved money outside their retirement plan" crap, because, who says they didn't? How much of your ire that is directed at those who chose to work for someone else and now have been shafted by :"Da Man" is really envy because you and your spouse for life chose not to? Have you saved enough money for retirement? Are you going to decline to receive your OASI benefits at your chosen age on moral grounds?
ReplyDeleteOh well, you can't read everything. The Wall Street Journal sees fit to have her on their staff though. I will read it as soon as it becomes available, either in print or electronically(which is a great great service and excellent investment and return on the meager amount of my income tax obligation that continues to give back immeasurably) at the 2 local public libraries I belong to in my two current domiciles which I certainly support and am even in favor of a certain measure of federal funding for which has been occurring for over 5 decades now and helped foster worldwide inter-library communication and resource sharing, continued intellectual freedom and open access to information for all. By the way, the Pubs appear to have several near dunces running for that big job in Washington. That scares me, if not you.
No I did not read the comments thread for this link though I do sometimes, but not in this case. I will read the book.
ReplyDelete