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Companies controlled by PE firms use bankruptcy to shed pension obligations

washingtonpost.com

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Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#121

Post by PurpleBoxDragon »

kenmicklas wrote: post #114
madengr wrote: post #81

Earlier quoted context omitted.

So you are supposed to just give your estate to the government? Fuck that.

Why not? Then the wealth can be distributed to everyone fairly. Having this safety net available for everyone and not just the rich would reduce the need for wealth hoarding in the first place. Your ideology has no justification besides your own particular interest in the class position of your offspring.

>Then the wealth can be distributed to everyone fairly.

Who determines what is fair?

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#122

Post by stevenwoo »

tome wrote: post #70
stevenwoo wrote: post #67

Earlier quoted context omitted.

The two most depressing books I have read recently are A People's History of the United States and Lies My Teacher Told Me and I wish I had read them when I was a child but YMMV.

Hopefully the fourth paragraph of the Wikipedia article will help you feel less depressed, since "A People's History of the United States has been criticized heavily by historians from across the political spectrum. Critics assert blatant omissions of important historical episodes, uncritical reliance on biased sources, and systematic failures to examine opposing views." https://en.wikipedia.org/wiki/A_People%27s_His…

There is a late chapter where the author has a full throated call for what sounds like community socialism as practiced by Jesus and in my opinion the book is worse for it but the excerpts from the interviews he did in the latest editions and separate book make up for it, also I appreciated the alternative sides that were fighting on all sorts of political issues that lost even if they are seen as biased because the it's natural for either side in a conflict - it's interesting because I'm old enough to have been taught the Columbus and Pilgrams as beneficient travelers tale even up to high school, and the native American experience/side is pretty inadequately covered by most all media.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#123

Post by bsbechtel »

jandrese wrote: post #109
bsbechtel wrote: post #19

Earlier quoted context omitted.

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.

Social Security isn't an investment. It's more like an insurance scheme against old age. Everybody pays into the pot and that is divvied up among everybody who qualifies (retirees).

Is that not what a pension is for workers who qualify by working at a company long enough?

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#124

Post by pm24601 »

theandrewbailey wrote: post #63
pm24601 wrote: post #52

Earlier quoted context omitted.

> 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.

1. "S.O.C.I.A.L. S.E.C.U.R.I.T.Y." isn't a separate company. It's a US government program. 2. Social Security isn't doing much better. It will be broke in ~15 years, paying out exactly as much as it takes in. https://www.cnn.com/2018/06/05/politics/social-security-bene...

Only fix needed to "unbreak" Social Security:

Remove the income cap limit. ( https://www.fool.com/investing/2017/12/10/what-is-the-2018-m...)

All income over $128K is does not have a social security tax on it.

Remove the cap and there will be no problem.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#125

Post by paulie_a »

bsbechtel wrote: post #82
paulie_a wrote: post #48

Earlier quoted context omitted.

Make a conscious and overt decision to forfeit those accumulated benefits.

Sounds a lot like wage theft to me. If a company tried to do that to employees who left, that's what it would be called.

How so? You leave, they stop paying you. Any funds for retirement is your account. You leave the country and renounce citizenship, you no longer get the benefits of citizenship which includes social security. That seems pretty fair.

And yes a company doing that is a completely different situation. Like it or not we pay into a pool that if you are a citizen you will receive benefits. You also pay into an account for your 401k that you own. Renouncing citizenship, you walked away from the former account.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#126

Post by jnwatson »

AlexTWithBeard wrote: post #57
tome wrote: post #45

Earlier quoted context omitted.

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?

There's always a risk an annuity provider will go bust.

There's also a risk of a meteor hitting the earth. The likelihood is very low.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#127

Post by maxxxxx »

mlthoughts2018 wrote: post #112
maxxxxx wrote: post #93

Earlier quoted context omitted.

"They should have been mostly in credit and as rates plummeted, credit rallied. They would have done quite well." That's the thing with investment advice. There is a lot of "should" and "would" advice in hindsight but not so much concrete advice about the now. Also, if you just have a major medial issue, all your well-laid plans will be moot. We are engaging in a massive financial experiment over the last few decades…

Unexpected legal expenses, medical expenses, family emergencies, all with money locked away behind 401(k) rules and penalties. As I mentioned in another comment, my grandparents had gone to some retail financial planner like Edward Jones or something, small town, some guy whose family they knew, and he just turned out to be deeply incompetent. Imagine being elderly and not personally competent to understand ideas lik…

"Imagine being elderly and not personally competent to understand ideas like the relative risk of equity or bond portfolios, and your children are equally as incompetent and can’t really help you, and the local options for financial planners are also equally as incompetent. "

And how do you find a someone financially competent? Even a lot of the superstars blow up eventually. I think it's just a gamble.

There is a ton of cargoculting going on in financial advice. In the end nobody knows how to do it right long-term.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#128

Post by Joky »

mlthoughts2018 wrote: post #106
tedmiston wrote: post #98

Earlier quoted context omitted.

401ks are investment vehicles or "buckets" that contain investments, rather than investments themselves, so a 401k's risk level depends entirely on the underlying assets (investments) that it holds. There is nothing inherently more safe about a 401k from an investment perspective compared to any other type of bucket. Within their 401k, most people hold a higher percentage of stocks (more to gain) earlier in their wor…

I think a deeply underappreciated point in all this is to stop and consider that the description you’ve given above, which is a really nice summary, would be so utterly bonkers advanced-sounding and deeply complicated to average workers that they would absolutely have no comprehension whatsoever what any of this means, how to act on it, etc. Even working in quant finance and managing these portfolios for huge pension…

> the description you’ve given above, which is a really nice summary, would be so utterly bonkers advanced-sounding and deeply complicated to average workers

But this description was very technical, another way to approach it is: keep in mind that there is no 100% safe way to save money, if you are looking to set money aside for retirement you may just put it a "retirement fund" based on the year you plan to retire (or a bit earlier to be conservative).

For example the "Vanguard Target Retirement 2010 Fund" lost 21% in 2008: https://investor.vanguard.com/mutual-funds/profile/performan... (but gained 19% in 2009 and 11% in 2010).

Edit: I agree that access to the information is a big problem for the common people. This is a valid general concern outside of just planning retirement though.

Re: Companies controlled by PE firms use bankruptcy to shed pension obligations

#130

Post by hakfoo »

nradov wrote: post #20

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,…

A defined-benefit pension is a math product. The same product could theoretically be sold as an individual account.

You're X years old? Statistically likely to retire at Y and live to Z? If we assume N% average rate of return, this is how much you have to pay every month until then to get a given payout at retirement. The risk theoretically belongs to the issuer, who has to eat the difference if they underestimated any of these numbers, and their reward comes from pricing conservatively and keeping gains beyond the promised return.

What has gone wrong were yeas of assumptions that weren't just inaccurate, but consistently inaccurate in over-optimistic directions. "We'll average 16% per year when 7 is more realistic." "Everyone will drop dead within 36 months of retirement." and seemingly "Nobody will plunder or slash contribution that were negotiated long ago."

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