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Thread: AS I stated Major pension crisis starting in 2017

  1. #361
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    Will never happen!

    Gold to $100 is more likely.......everything is a FRAUDE trade nowadays

  2. #362
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    The headlines today about GE is freezing pensions for 20,000 on BloombergTV. Shades of things to come. Trillions are owed to almost every major pension plans combined. tick toc tick toc.
    ...be your own Health Care System... grow your own and eat well

  3. #363

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    Quote Originally Posted by digbird View Post
    The headlines today about GE is freezing pensions for 20,000 on BloombergTV. Shades of things to come. Trillions are owed to almost every major pension plans combined. tick toc tick toc.
    Like all ponzi shemes, when you are the last one in the line you are thrown under the bus. It are the managers who invented the pensionfunds and now are already retired who say good luck to those who believed the first edition of the commandements of the animal farm....

    Golditiki2+++

  4. #364

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    Here's the problem. Don't misunderstand me, yes: people, governments, unions ...etc. have all been too generous with pensions.

    However, this entire thread is attacking the wrong side of the problem. Y'all seem to think that these pensions just magically became underfunded. The real problem with the vast majority of these pensions is that they were founded during a timeframe when you could easily get 5% - 10% and even 20% on a bank CD. The cost to the company to fund these liabilities was (quite literally) pennies on the dollar.

    The big issue today with all of these pensions is the discount rate. The companies cannot afford to pay for a liability discounted at 0%. It was never supposed to work that way. The low interest rates have ROBBED the livelihood of the middleclass who have historically been the 'scrimp and save' sort of folk. Low interest rates have taxed us for the last 10+ years so that our savings and checking rates are at zero... This is ALL a tax on those who have saved. Furthermore, it is now taking the rest of what they depended upon - the pension.

    Yes, I get it, sometimes it was abused, but not every pension and not every person was a player trying to scheme money away from the company. Good companies provided for good people. In fact, many people stayed with a company for 40+ years because it helped the company and it helped them in their pension. The real problem here is the interest rate and a lot of good/hardworking people are going to get hurt with these pension failures.
    Aarcher - always hitting the mark. -XX----->

  5. #365
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    Quote Originally Posted by Aarcher View Post
    Here's the problem. Don't misunderstand me, yes: people, governments, unions ...etc. have all been too generous with pensions.

    However, this entire thread is attacking the wrong side of the problem. Y'all seem to think that these pensions just magically became underfunded. The real problem with the vast majority of these pensions is that they were founded during a timeframe when you could easily get 5% - 10% and even 20% on a bank CD. The cost to the company to fund these liabilities was (quite literally) pennies on the dollar.

    The big issue today with all of these pensions is the discount rate. The companies cannot afford to pay for a liability discounted at 0%. It was never supposed to work that way. The low interest rates have ROBBED the livelihood of the middleclass who have historically been the 'scrimp and save' sort of folk. Low interest rates have taxed us for the last 10+ years so that our savings and checking rates are at zero... This is ALL a tax on those who have saved. Furthermore, it is now taking the rest of what they depended upon - the pension.

    Yes, I get it, sometimes it was abused, but not every pension and not every person was a player trying to scheme money away from the company. Good companies provided for good people. In fact, many people stayed with a company for 40+ years because it helped the company and it helped them in their pension. The real problem here is the interest rate and a lot of good/hardworking people are going to get hurt with these pension failures.
    I agree 100% with your posting. But what is the fix? Change the rules so that those pension funds that can't buy shares on the stock market would now be allowed to do so as most pension funds can only invest in interest bearing instruments? Renegotiate the payout of the ones that pay out way to much? Charge the people be it government overseer's, companies that didn't make the topping up as they were suppose to? This is a real mess.
    ...be your own Health Care System... grow your own and eat well

  6. #366

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    Quote Originally Posted by Aarcher View Post
    Here's the problem. Don't misunderstand me, yes: people, governments, unions ...etc. have all been too generous with pensions.

    However, this entire thread is attacking the wrong side of the problem. Y'all seem to think that these pensions just magically became underfunded. The real problem with the vast majority of these pensions is that they were founded during a timeframe when you could easily get 5% - 10% and even 20% on a bank CD. The cost to the company to fund these liabilities was (quite literally) pennies on the dollar.

    The big issue today with all of these pensions is the discount rate. The companies cannot afford to pay for a liability discounted at 0%. It was never supposed to work that way. The low interest rates have ROBBED the livelihood of the middleclass who have historically been the 'scrimp and save' sort of folk. Low interest rates have taxed us for the last 10+ years so that our savings and checking rates are at zero... This is ALL a tax on those who have saved. Furthermore, it is now taking the rest of what they depended upon - the pension.

    Yes, I get it, sometimes it was abused, but not every pension and not every person was a player trying to scheme money away from the company. Good companies provided for good people. In fact, many people stayed with a company for 40+ years because it helped the company and it helped them in their pension. The real problem here is the interest rate and a lot of good/hardworking people are going to get hurt with these pension failures.
    I think the real problem is that pensions should have never existed. For that matter Social Security should have never existed. If instead you would have mandated a private investment account where they were mandated to contribute 6.2% with a 100% employer match up to that level (but you could contribute more tax free) we would all be richer, government and individual alike. Died at 68? Well your kids get most of the money because it was your MF money to begin with so you can pass it on.

  7. #367

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    Norway, small country turned 5 million back in 1995 into a trillion today, it's called the sovereign wealth fund, they retire at 60 and don't know what a copay, or deductible is so yes, SS is basically fraud in comparison. GE will also force lump sum buyouts to another 100 thousand, guaranteed payouts slipping away now. Even with the economy flying pension payouts suffering.

  8. #368

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    Quote Originally Posted by digbird View Post
    I agree 100% with your posting. But what is the fix? Change the rules so that those pension funds that can't buy shares on the stock market would now be allowed to do so as most pension funds can only invest in interest bearing instruments? Renegotiate the payout of the ones that pay out way to much? Charge the people be it government overseer's, companies that didn't make the topping up as they were suppose to? This is a real mess.
    Not all pensions are prohibited in investing in stocks, those which I've seen are allowed to hold a diversified portfolio of both stocks and bonds. However, you are right, typically there is some sort of asset allocation restriction - the powers that be wouldn't want the pension put on 100% on black in vegas and/or 100% stocks either.

    How to fix it now? In reality it should've been fixed back in the day. The fixes now will cause pain to most people involved.

    Here's some ideas ... but granted, I'm sure not all of these would even be legal (i.e. in the pension contract) but these are some possibilities.
    First of all, you go looking for what I call "the scammers." These are the ones who "didn't put in their time". Or somehow they got a sweetened pension. As an example: I've heard stories of school superintendents getting HUGE pensions after working for just a year or two... because the school system counted other non-school service into the formula. Boom - you give those phonies exactly what they deserve ... only credit for what they earned.

    Next, you take a look at the medical side of the pension - often this is a overlooked benefit which some folks get where the costs have been growing at an unrealistic rate - I imagine it's something like 15% per year for the last 15 years. You send out pamphlets and tell them to get on medicare. That there will be a one time subsidy (which would be a fraction of post-retirement medical costs) which would help them in the first year or two of medicare.

    Then you push back the retirement age a year or two. You tell people - it's either this ... or insolvency and nobody gets anything. This (admittedly) is horribly painful for a lot of folks - I get it. However, it's an option.

    You cap the pension payout. For the high-income earners - they can only have up to $X payout. Yes, I get it that the high-income folks always get attacked, but they should have enough in savings and 401k whereas the low income folks had to scrape by throughout their years at the job and may not even have a 401k.

    Just a few ideas ... again, I'm not sure any/all of these would even be possible.
    Aarcher - always hitting the mark. -XX----->

  9. #369

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    Quote Originally Posted by Aarcher View Post
    Not all pensions are prohibited in investing in stocks, those which I've seen are allowed to hold a diversified portfolio of both stocks and bonds. However, you are right, typically there is some sort of asset allocation restriction - the powers that be wouldn't want the pension put on 100% on black in vegas and/or 100% stocks either.

    How to fix it now? In reality it should've been fixed back in the day. The fixes now will cause pain to most people involved.

    Here's some ideas ... but granted, I'm sure not all of these would even be legal (i.e. in the pension contract) but these are some possibilities.
    First of all, you go looking for what I call "the scammers." These are the ones who "didn't put in their time". Or somehow they got a sweetened pension. As an example: I've heard stories of school superintendents getting HUGE pensions after working for just a year or two... because the school system counted other non-school service into the formula. Boom - you give those phonies exactly what they deserve ... only credit for what they earned.

    Next, you take a look at the medical side of the pension - often this is a overlooked benefit which some folks get where the costs have been growing at an unrealistic rate - I imagine it's something like 15% per year for the last 15 years. You send out pamphlets and tell them to get on medicare. That there will be a one time subsidy (which would be a fraction of post-retirement medical costs) which would help them in the first year or two of medicare.

    Then you push back the retirement age a year or two. You tell people - it's either this ... or insolvency and nobody gets anything. This (admittedly) is horribly painful for a lot of folks - I get it. However, it's an option.

    You cap the pension payout. For the high-income earners - they can only have up to $X payout. Yes, I get it that the high-income folks always get attacked, but they should have enough in savings and 401k whereas the low income folks had to scrape by throughout their years at the job and may not even have a 401k.

    Just a few ideas ... again, I'm not sure any/all of these would even be possible.
    the Pension system topic is like democracy, there is not a worldwide definition of what it is, how it should be working and what people should get. In some countries people wage earming or not are obliged to join a pension system. in other countries it is a completely personal saving matter.

    The problem is twofold, a) money value depreciation = one has paid for 45 years valuable money and will get a steady devaluing pension.
    b) the other point is that the pension promises have in some cases been too high compared to the input, the outflows due to the lower interest rates and dividends are now too big compared to the earnings of the funds.

    The solutions are in case a) to have been forward looking and building a complementary savingnest. In the case B, the pension fund should proportionally diminish the payments to the retirees or increase the inputs one way or another, either higher fees or longer working years. There do not exist a thousand solutions.
    IMO we always come to the same problem, NOBODY wants to put the knife in the problem. We KNOW already for thirty years what is getting now acute, but we will wait till somewhere they will drag a politician behind a lorry by this feet like somewhere in southern Mexico the farmers did with a mayor who did not keep his promises.

    I think to be a politician will be a dangerous job in the coming years.

    Golditiki2+++

  10. #370
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    Quote Originally Posted by DBCooper View Post
    I think the real problem is that pensions should have never existed. For that matter Social Security should have never existed. If instead you would have mandated a private investment account where they were mandated to contribute 6.2% with a 100% employer match up to that level (but you could contribute more tax free) we would all be richer, government and individual alike. Died at 68? Well your kids get most of the money because it was your MF money to begin with so you can pass it on.
    Post WW2 as we rebuilt, companies competed for talent and Unions were successful at competing for talent by dividing compensation up into several tranches. 1. Salary (or, in my case compensation), health care and pensions. We all compared and approved of this form of "total compensation (immediate and some deferred).

    So I can fully agree that pensions, per se should not have come into vogue. Pensions did create a challenge foe companies that many may not at first recognized as a problem or threat. And, of course, abuse perhaps did settle in. False solutions to unrealistic expectations may have surfaced too as many people (back then) did not realize the full "cost" of inflation. Nor did they (yet) believe their government would devalue their future earning so blatantly and criminally.

    My pension is welcomed even though it does not buy now what I would have hoped for back then.

    The bigger problem is forcing workers into the equities market where the only yield to tackle devaluation lies is a terrible problem for those who will wind up on the schitty end of the deal when bad times hit.
    Who are the righteous? ....Markpti

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