251–260 of 260 posts
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Stock is up 3% on this news, and no doubt will be up on future news of cuts to headcount, benefits, etc. So there's a conflict of interest here.
>Stock is up 3% on this news What? According to google finance, the stock closed $8.57 last Friday, opened $8.55 today, reached an intra-day high of $8.65, and closed at $8.56. There's no way you can say that it was up 3%.
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There's no magic financial effect that makes the money going into a DB scheme worth more. The money has to come from somewhere and, in these cases, it's from companies that underestimated or ignored what the future costs would be.
You do understand that DB is a collective scheme and DC its not just you. Your DB pension is funded by those that came before you and those coming after.
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In Germany, the pension (Rentenversicherung) follows you during your employment life, the mandatory contributions are automatically paid by your employer and it does not matter if the employer goes belly-up at some time between now and your eventual death. The idea that someone could lose their retirement and depend on social security or nothing at all simply because the company one has dedicated his life to goes ban…
It is a horrible idea, which is why it’s not true for defined benefit retirement funds in the US. Unless one happens to work for a religious organization, in which case, yes, I agree, we should remove the religious exemption from needing to contribute to the common insurance fund for defined benefit plans.
What exactly about this idea is horrible? Of course it sounds like socialism but what's the concrete things that are "bad"?
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Definitely don’t put your own company’s stock in your 401k. The 401k plans I’ve seen all had an option to invest the money in a diverse fund. Either a target date retirement fund that auto allocated to a mix of stocks and bonds, or to other funds such as an S&P 500 index. Freezing employee stock sales is fairly normal as I understand it. I get emails all the time from my publicly traded employer stating I cannot trad…
Freezing stock to prevent insider trading is one thing... Freezing it to prevent a stock price crash and buy the company a few more days at the expense of employees is another.
That said, I looked it up and it seems like the claim at the time was there was an “administrative change” to the plan during that period, so not what I speculated it might be.
I really think that the sooner we can separate out pensions and healthcare from employers, the better. Businesses main area of expertise is not in pensions and healthcare, and they cannot provide these services as efficiently as if there were many different insurance companies on the market offering these services for sale, and instead the company paid you a fee for your services, and then you went out on the market…
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Main one is Tax relief at your highest rate on income tax you get an extra 20% into your pension - if your a higher rate tax payer you can reclaim the extra tax relief. For a higher rate taxpayer you put in £60 and get £100 in your pension. You can also do salary sacrifice and reduce you income tax and NI lability
Unless your retirement tax rate will be lower than your working years rax rate, it comes out in the wash eventually. It's quite likely that some people today will end up paying higher income tax rates in retirement than today.
And you can use drawdown to manage your income from the pension and you would of course make use of income from your ISA.
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You do understand that DB is a collective scheme and DC its not just you. Your DB pension is funded by those that came before you and those coming after.
I'd love to hear how someone would intonate a statement beginning with 'you do understand' if they said it to me in meatspace.
Its phrasing in that sense would be similar to "Dude your making a big mistake"
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You do understand that DB is a collective scheme and DC its not just you. Your DB pension is funded by those that came before you and those coming after.
I'd love to hear how someone would intonate a statement beginning with 'you do understand' if they said it to me in meatspace.
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It is a horrible idea, which is why it’s not true for defined benefit retirement funds in the US. Unless one happens to work for a religious organization, in which case, yes, I agree, we should remove the religious exemption from needing to contribute to the common insurance fund for defined benefit plans.
> It is a horrible idea, which is why it’s not true for defined benefit retirement funds in the US. What exactly about this idea is horrible? Of course it sounds like socialism but what's the concrete things that are "bad"?
There’s a government supported backstop for pension funds if the company goes out of business.
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> The administration costs of 401k's make it more challenging for small companies to offer. It's not at all clear to me that 401Ks need to exist when we already have IRAs. Why not just increase the contribution limits on traditional IRAs to 401K levels? It gives everyone access to the same savings options, employees aren't tied to a single 401K provider that can gouge them on fees, employers don't have to administer…
I don't believe that employers can pay a "match" into IRAs. (Now, whether allowing them to do so into 401(k) is a good idea in the first place is a fair question. It's great if you're a solo employer, and serves to encourage some level of savings as an individual, but I wonder if we couldn't get some of the benefit of the second in another manner.)