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America's pensions can't beat Vanguard but they can close a hospital

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Re: America's pensions can't beat Vanguard but they can close a hospital

#291

Post by patmorgan23 »

Starman_Jones wrote: post #150
PlatoIsADisease wrote: post #105

Earlier quoted context omitted.

Is this actually true? I think about my lab classes and typically these were separate credit hours. More money to the university. Outside chemistry, we were using outdated equipment that wasn't getting refreshed/bought new. If what you are saying is true, Humanities needs to cut costs of their credit hours or double down. For entertainment degrees (art, music), its prohibitively expensive to casually obtain the educa…

"Labs" as in the physical facilities, not the class credits. Computer labs are one example - my school had a Linux lab that, uh, wasn't much used outside of CS/IT/maybe EE. There's also lab equipment for research professors - a nice oscilloscope can cost more than a new car, and students won't ever actually get to use that. Not saying it's wrong - I really appreciated that Linux lab - but it's definitely not equality…

[dead]

Re: America's pensions can't beat Vanguard but they can close a hospital

#292

Post by BobaFloutist »

Spivak wrote: post #290
BobaFloutist wrote: post #274

Earlier quoted context omitted.

>My grandpa paid his way to a PhD as a line cook. Got no financial support from family who were only slightly above dirt poor. That can still be easily done. In California, most families earning under $100k get their tuition costs to UCs covered. CSUs are probably even easier. Then, PhDs largely get paid for by undergrad tuition and research grants, it's pretty unusual for PhDs to pay their own way.

Right, so broadly the solution you're proposing is subsidies. University will be cheaper from the perspective of the student but we don't actually undergo any meaningful cost cutting it's just the money comes from somewhere else. I don't know about you but I don't think this actually solves the problem of the cost of university ballooning out of control and becoming unaffordable to almost every American if they had t…

I'm not proposing a solution, I'm describing the current reality.

Re: America's pensions can't beat Vanguard but they can close a hospital

#293

Post by toomuchtodo »

MontyCarloHall wrote: post #128

Isn't the main problem with pensions today the dramatic increase in life expectancy post-retirement? They were never intended to support decades of retirement: in the old days, you retired at 65 and there was a good chance you'd be dead by 70, at most 75. (When Social Security was established in the 1930s, life expectancy was only 61.) Nowadays, there's a good chance you'll live beyond 90, with expenses increasing di…

No, the problem was that increased contributions [that would've ensured solvency with lower market returns and/or extended life expectancy] would've cost more sooner, and no one wants to pay more. So, we "extend and pretend" using generous return assumptions and when those assumptions are not borne out in reality, we simply shrug. Similar to $39T in US treasuries someone will need to pay back. Only the top 40% of Americans have enough income to have a federal tax liability, so who is going to pay this debt back? Different sides of the same coin. What is a debt after all besides a promise to pay.

Re: America's pensions can't beat Vanguard but they can close a hospital

#294

Post by LorenPechtel »

jltsiren wrote: post #141
aresant wrote: post #51

From first principles public pension funds are broken. The "Safe Withdrawal Rate" assumed by many private individuals planning for their own retirement assumes a withdrawal rate in the 3 - 4% range based on the "trinity study" - https://en.wikipedia.org/wiki/Trinity_study Meanwhile, American public pensions are structurally engineered around a 7%+ SWR - this was recently confirmed again by the median goal by the Nati…

Individuals saving for retirement must deal with the risk that they live to an old age and their savings must last for decades. Pension plans have a higher safe withdrawal rate, because people on the average have average lifespans. When a plan member dies early, their remaining contributions can be used (partially or in full) to fund other members' pensions.

And a pension fund can be in a more tax advantaged situation.

But that does not justify the numbers we actually see being used.

Re: America's pensions can't beat Vanguard but they can close a hospital

#295

Post by LorenPechtel »

lotsofpulp wrote: post #149
jltsiren wrote: post #141

Earlier quoted context omitted.

Individuals saving for retirement must deal with the risk that they live to an old age and their savings must last for decades. Pension plans have a higher safe withdrawal rate, because people on the average have average lifespans. When a plan member dies early, their remaining contributions can be used (partially or in full) to fund other members' pensions.

Only taxpayer funded defined benefit pension plans get to use 7%+. Because they have the power to use future taxpayers’ money to pay for underfunding/underperformance/corruption from the past. And obviously, politicians that would choose to increase taxes today for something that could but punted to the future would lose elections. The Pension Protection Act of 2006 mandates that non taxpayer funded defined benefit p…

The power to use future taxpayers money isn't justification for doing so.

Re: America's pensions can't beat Vanguard but they can close a hospital

#296

Post by WalterBright »

dbspin wrote: post #286
WalterBright wrote: post #196

Earlier quoted context omitted.

> in direct opposition to current goal of producing labour units for corporate I never understood this characterization. How do the schools implement a goal for producing labor units? > education itself of course should be free People don't value what they get for free. If you sign up for a course in welding, are you going to be more or less diligent in learning it if you have to pay the tuition?

> People don't value what they get for free No education is free, it's paid in time and effort. I value my degree because it was difficult, not because it had a cost attached. One that could be purchased without effort would have no value.

Paying tuition out of one's own pocket motivates one to learn the material.

Re: America's pensions can't beat Vanguard but they can close a hospital

#297

Post by sidewndr46 »

justin66 wrote: post #146
sidewndr46 wrote: post #6

Earlier quoted context omitted.

Unless we're just talking about regular embezzlement of funds, how do you crash an ETF? I'm talking about broad index funds. Not stuff like ARKK

> how do you crash an ETF? I'm talking about broad index funds. Not stuff like ARKK Any ETF's share value can "crash" if there are not enough buyers to purchase shares when they are trading below NAV (net asset value). It's worth a quick google to see what "market makers" or "authorized participants" do, but the thing to keep in mind is: if the market is kind of exploding in some major ways (think 2008) an ETF might…

But why would that happen? Let's say an ETF normally trades at 99% of it's NAV. Suddenly it "crashes" and only trades at 97.2% after some bad news. Bob in accounting embezzled millions. It's gone, Bob spent it all at the strip club. Wouldn't some investor decide to just net the approximately ~1.8% by increasing demand and buying it up? After all, Bob embezzled millions. Not the billions that larger ETFs control.

Unless you're proposing some weird industry wide boycott of Vanguard or something. In that case the only thing stock traders are going to accomplish is destruction of every publicly traded asset they hold as market confidence in retail traders slowly slips downwards.

Re: America's pensions can't beat Vanguard but they can close a hospital

#298

Post by devman0 »

zeroonetwothree wrote: post #187
devman0 wrote: post #85

Earlier quoted context omitted.

It is supposed to be if the amounts are above $250,000. I have no problem with the first $250k being risk free, that is a policy that is well published and that we all "agree" on. Making arbitrary policy decisions that in some cases depositors should be made whole when risky behavior (such as depositing above the insurance limit) bites them is problematic. Stick to the policy or change the policy don't make one off e…

I’m sure you would feel differently if it was your employers money there and they weren’t able to pay your salary. $250k is not much at all for a business

Businesses can use deposit management services to spread cash among many banks. Bonus points they also are less impacted by the poor business practices of one bank.

Individuals can do this too with investment brokers or wealth management providers.

Alternatively we could just made FDIC coverage unlimited, but then that creates poor risk taking incentives, which is the whole point of not setting the expectation of the a bailout by making exceptions.

Re: America's pensions can't beat Vanguard but they can close a hospital

#299

Post by LorenPechtel »

thelastgallon wrote: post #75

Pension funds should have a rule -- invest in technologies, industries and companies that create a deflation (by technology, scale, efficiency, etc). This will create better outcomes for pensioners. If they invested in cheaper housing, healthcare, pensioners can live without the constant fear of running out of money. The absolute first thing to invest in is clean energy which can be super cheap to zero to actually ma…

I'd go the opposite: pension funds can only invest in market index funds.

Re: America's pensions can't beat Vanguard but they can close a hospital

#300

Post by lotsofpulp »

LorenPechtel wrote: post #295
lotsofpulp wrote: post #149

Earlier quoted context omitted.

Only taxpayer funded defined benefit pension plans get to use 7%+. Because they have the power to use future taxpayers’ money to pay for underfunding/underperformance/corruption from the past. And obviously, politicians that would choose to increase taxes today for something that could but punted to the future would lose elections. The Pension Protection Act of 2006 mandates that non taxpayer funded defined benefit p…

The power to use future taxpayers money isn't justification for doing so.

Yet that is the modus operandi of governments worldwide that need to secure the votes of the old. There is no reason the US explicit has different rules for taxpayer funded and non taxpayer funded defined benefit pensions. They are the same liabilities, the same cash flows, the same probabilities, just different political entities on the hook.

Even some non taxpayer funded defined benefit pension plans are more privy than others, depending on the political power of their beneficiaries.

https://archive.is/CJefA

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