A preview of the U.S. without pensions • Hacker News Board

Re: A preview of the U.S. without pensions

#91

Post by sbennettmcleish » Sun, Dec 24, 2017, 1:24 PM UTC

These "company managed" pension schemes have always fascinated me and would seem ripe for corruption / raiding by the company if they're short a few $$$.

Seems like in Australia we're in a pretty good position with "superannuation" https://en.wikipedia.org/wiki/Superannuation_in_Australia being compulsory since 1992 and is typically managed by completely unrelated parties to your employer.

The payments are generally made directly by your employer into the fund of your own choosing.

The biggest thing is once you've had this contributed to YOUR account, it is YOURS (drawable from age 65) and doesn't matter what happens to the fortunes of your employer(s) in the future.

Re: A preview of the U.S. without pensions

#92

Post by tibbetts » Sun, Dec 24, 2017, 2:03 PM UTC

rukittenme wrote: post #37

Here's a fun game for everyone. If you don't save, and your company doesn't save, and your government doesn't save then how the hell do you figure you're going to retire?

If your economy isn’t growing then why would anyone want the resources you have “saved”.

Re: A preview of the U.S. without pensions

#93

Post by ineedasername » Sun, Dec 24, 2017, 2:04 PM UTC

hkmurakami wrote: post #83

ineedasername wrote: post #81

Earlier quoted context omitted.

Except the US has positive average Gdp growth in the range of 2%, and positive population growth as well.

Fwiw the last 10 years have an average yoy growth rate of 1.48%, which is a difference in magnitude great enough from 2% to point out. We have population growth fueled by immigration. If not for this the US would have population decline. This is what makes us very much an outlier amongst developed nations [1]. Despite this our pension funding situation does not look good. [1] Germany probably has strong net inflows o…

France, Germany, Canada, US, Australia... many or all of the most advanced western nations have positive avg gdp around 1.5 to 2% and positive population growth as well. These are not the primary factors behind failing pension systems. In nearly all cases it ends up that those in charge dont make the required payments. In my home state that is the issue: had the mandated payments been made there would be no crisis. The state broke its own contract and dissobeyed a court order to fund unrelated discretionary spending. The major private pension failures have been similarly aflicted, executive flee a bankrupt company with agregate golden parachutes measured in hundreds of millions but the pension fund was ignored with underpayments for decades.

Our retirement systems are broken, and part of it stems from their own excessive costs, but there is no sinhle cause here, its a complex issue with complex causes, and shifting demographics and economic growth are only very minor factors. Bad policy, cynical politics and budget shenanigans, self interested executives, and simple incompetence and hobest mistakes all play the bigger part.

Re: A preview of the U.S. without pensions

#94

Post by chrisbennet » Sun, Dec 24, 2017, 2:08 PM UTC

dizzystar wrote: post #40

SubiculumCode wrote: post #31

Earlier quoted context omitted.

My parents finally have health insurance after ACA, so yeah, they ARE better off.

I recently worked in two restaurants. Everyone was part time because no one wanted to employ full time. No one had insurance. On of my coworkers ended up in the hospital. She was taken on then dropped by 4 insurance companies, this was directly after she lost her military coverage. She's 15k in debt working a job that pays $200/week. I can toss a lot more stories back at you if you want.

Are you implying that she would have had insurance before the ACA? Before the ACA, you could get "cheap" insurance, but it was often a scam. I know because I discovered that the hard way. Pre-existing conditions are a thing.

Re: A preview of the U.S. without pensions

#95

Post by ericd » Sun, Dec 24, 2017, 2:08 PM UTC

nunez wrote: post #24

jstewartmobile wrote: post #18

Earlier quoted context omitted.

I'm not sure 401ks are so great. Many charge ridiculous management fees for funds that track mundane things like the S&P 500, but if you want that employer match, no way around it. Mostly a case of perfectly intelligent people throwing wads of money into the market on autopilot because that's all the 401k lets you do. Lambs to the slaughter! edit: Example: Back when I was on 401k, was into a S&P500 fund that had an e…

Yeah the only time it makes sense to have a 401k is if your company matches your contributions.

Not really, it also makes sense to have one if you're already maxing out your IRA (as long as it's a low fee 401k, many aren't).

Re: A preview of the U.S. without pensions

#96

Post by sjg007 » Sun, Dec 24, 2017, 2:12 PM UTC

sbennettmcleish wrote: post #91

These "company managed" pension schemes have always fascinated me and would seem ripe for corruption / raiding by the company if they're short a few $$$. Seems like in Australia we're in a pretty good position with "superannuation" https://en.wikipedia.org/wiki/Superannuation_in_Australia being compulsory since 1992 and is typically managed by completely unrelated parties to your employer. The payments are generally…

Replace corporation with government and you see the same behavior at city/county/state/national levels.

Re: A preview of the U.S. without pensions

#97

Post by chrisbennet » Sun, Dec 24, 2017, 2:15 PM UTC

clackanon wrote: post #62

cmurf wrote: post #35

Today, Social Security provides only enough for a bare-bones budget, about $14,000 a year on average. Republicans: This is too much money, we can't afford it, it's take from the rich, give to the poor, these social programs need to end. Grandma deserves to die under a bridge by herself, it's her own fault she didn't work harder or save more. Me: A bullet to the head of the aging is more ethical than the Republican pr…

I'm not saying I have a better answer, but wealth redistribution is theft. That's every bit as immoral as leaving grandma on the street.

When the 8 richest men have as much wealth as the poorest 50% of the planet one might conclude that wealth has already been redistributed.

Re: A preview of the U.S. without pensions

#98

Post by [deleted] » Sun, Dec 24, 2017, 2:26 PM UTC

sumedh wrote: post #88

Kyragem wrote: post #20

Yet these old folks all voted for trump/GOP. Good luck trying to make a living when they cut social security next year.

They voted for Trump because he was saying he is going to bring back jobs while Clinton was not exactly sure what her platform was. If I am a 50 year man who lost his job, I am going to vote for Trump. It is just amazing that lot of people including you and Clinton don't understand this simple point.

[deleted]

Re: A preview of the U.S. without pensions

#99

Post by falcolas » Sun, Dec 24, 2017, 2:29 PM UTC

sbennettmcleish wrote: post #91

These "company managed" pension schemes have always fascinated me and would seem ripe for corruption / raiding by the company if they're short a few $$$. Seems like in Australia we're in a pretty good position with "superannuation" https://en.wikipedia.org/wiki/Superannuation_in_Australia being compulsory since 1992 and is typically managed by completely unrelated parties to your employer. The payments are generally…

My dads pension plan was raided in exactly that manner. Thankfully, his union took care of it for them, hiring a shark of a lawyer who got it refunded by fining the hell out of the executives and the company for their illegal actions.

Of course, he also inherited thousands of acres of land, so he’s not exactly in a bad place had it not been funded again.

Re: A preview of the U.S. without pensions

#100

Post by jshaqaw » Sun, Dec 24, 2017, 3:29 PM UTC

ec109685 wrote: post #53

ghufran_syed wrote: post #15

Defined benefit plans are unaffordable, whether for a company or a government. But while defined contribution actually generate great returns, they have the problem that urgent expenses always crowd out saving, particularly for lower income groups (same as it would if income taxes were collected annually, or less frequently). Seems like the optimal solution is to combine the compulsory contribution part of the curren…

Why are defined benefit plans always unaffordable? You don’t want people’s retirements to be affected by the value of their investment at the moment of withdrawal. Instead you want the benefit to incorporate the expected value at retirement of the investment over the long run. The problem with many pensions is that the businesses themselves supporting them essentially went belly up as competition, technology and inve…

This is a good point. DC is no more “unaffordable” inherently. DC puts the volatility of upside and downside shocks on the individual (or more practically an age cohort) versus smoothing it out over wider age cohorts. For example, I have lots of savings. The market up 20% this year is great for me. Not so much for the next age cohort who face mathematically lower returns from this level. If anything DB at the margin forces more realistic upfront accounting (despite pension accounting flaws) because when an entire age cohort faces ruin they will vote to socialize much of the pain anyway ex post.