81–90 of 155 posts
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The government does the same thing with SS. If you pass away before collecting benefits, those benefits aren't passed on to those who inherit your estate.
That's not wage theft though. You can't be paid after you're dead. Inheritance is just legalized aristocracy.
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You also lose your benefits if you move to another country and give up your citizenship. What do you call it then?
Make a conscious and overt decision to forfeit those accumulated benefits.
To me the bigger culprit is the unfunded pension as a tool of retirement planning. Unfunded pensions are failing or on the brink of failing almost everywhere they are tried. It's a huge scandal and deeply immoral IMO. I read the other day that NYC alone has over $100bn in unfunded pension liabilities. There is simply no budget to pay that down. Unfunded pensions taking down numerous economies in Europe. There is a co…
Fully funded pension plans are assets that a PE firm uses as collateral for the loan to do a hostile takeover of the firm.
FWIW this is exactly how it works in the UK. After employer and employee contributions are made my employer has nothing to do with what it's invested in etc.
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In the UK you can buy an annuity with the proceeds of your pension fund at retirement. Is the same not true of a 401(k) in the US?
Yes, a variety of products exist in the U.S. But when I did limited research in the past, I found high fees and low returns.
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I'd like to know the answer to that. I'm curious how it's legal to call something a "pension" without legal guarantees and professional oversight. Otherwise it's less a "pension" and more a "vague promise".
A pension is a lot like a loan - a promise to pay someone something with your future earnings. The problem is not that people sometimes fail to repay loans when they go broke, it's that they sometimes manage to weasel out of paying them despite not being broke, and then pocket the money they were supposed to use to pay the debt.
To me the bigger culprit is the unfunded pension as a tool of retirement planning. Unfunded pensions are failing or on the brink of failing almost everywhere they are tried. It's a huge scandal and deeply immoral IMO. I read the other day that NYC alone has over $100bn in unfunded pension liabilities. There is simply no budget to pay that down. Unfunded pensions taking down numerous economies in Europe. There is a co…
Why isn't it a solution to simply require pension funds to be fully funded, perhaps under a separate legal entity that's protected from raiding by PE firms? Why is it that the "unfunded pension" crisis always makes people question the second term in the phrase instead of the first?
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>a pension is part of your income It's usually part of a future worker's income. That is how they are underfunded. If the employee paid into a fund then these problems would happen less. The problem is it's a promise to pay future money to today workers in the future, and when future money does not pan out, there is no reason one debt holder (pensioner) should have absolute precedence over another (lender, who someti…
> there is no reason one debt holder (pensioner) should have absolute precedence over another (lender, who sometimes lends enough to get the company past bad times). Yes, there is a reason: people matter more than companies. Lenders can price that risk in. If that makes lenders "stay away"? Then the executive teams that get their golden parachutes get screwed too , and I'm frankly pretty okay with that. And let's be…
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Fully funded pension plans are assets that a PE firm uses as collateral for the loan to do a hostile takeover of the firm.
Shouldn't the assets of the pension plan be owned by the individual employees? A PE can't acquire a stock broker and just sell the stocks in people's accounts for profit. Why is a pension different? FWIW this is exactly how it works in the UK. After employer and employee contributions are made my employer has nothing to do with what it's invested in etc.
With a pension, you own a promise from the employer to pay you a fixed amount. How it does that is (theoretically) none of your concern.
Some consider pensions to be more pro-worker because you're entitled to the same payout regardless of market performance. But it seems to be turning out that the 401k is more worker-friendly, as there's no promise to be reneged.
Defined benefit pension plans create a huge moral hazard and are just too risky for employees, employers, and taxpayers alike. As a society we should be aggressively phasing out pensions and replacing them with defined contribution plans like 401(k) and 403(b). That way each employee's retirement funds are in an individual named account held by a brokerage and can't be taken away. Even if your employer goes bankrupt,…
No. The real risk is not in the present, the real risk is outliving your retirement savings. You can predict how long a population will live, you cannot predict whether a single person will need 5 or 40 years of retirement savings. Collective defined benefit plans mitigate this risk and are the only thing that really make sense. They also end up cheaper because instead of each person needing to save the amount needed…
Both social security and employer held pensions have to cut their payouts, but only one of them is democratic and has even a chance of being run in the interests of the beneficiaries.
"The group only needs to save the amount the average person will need" - the same is true if you buy an annuity. Or, give people preferential tax treatment for keeping money in their pension post retirement, don't let their family inherit it.
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If people want to set up annuities that is totally welcome. But they shouldn't be tied to the employer. It should be a separate company that exists solely for the purpose of paying the benefits at retirement. Depending on an employer for your retirement is, in the modern market, a proven bad idea. It's terrible what happened to your grandparents (to anyone else nearing retirement, take this as a cautionary tale and g…
> It should be a separate company that exists solely for the purpose of paying the benefits at retirement. Yes. S.O.C.I.A.L. S.E.C.U.R.I.T.Y. Look how well Americans will fight for and defend Social security benefits. We really should just force an expansion of Social Security like most civilized countries.