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Politics : Right Wing Extremist Thread
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To: Lane3 who wrote (6240)3/13/2001 8:53:22 PM
From: thames_sider  Read Replies (2) of 59480
 
Defined benefit pensions are also highly inequitable. The benefit those who earn the most, by definition... which is fine if you earn the most, but isn't really sensible for a company (since the same people are also paid the most). As Karen implies, they reward time-serving at the cost of mobility and personal freedom of choice where to work.
And they implicitly discourage risk and investment, since there's neither chance nor incentive to use the accumulated funds which are hopefully backing the pension for anything more than a secure retirement income.
Finally, they're an inducement to poorly-run companies to raid the pot - BA is a fine example recently in the UK - since they can point to any actuarial 'surplus' as 'proof' that they've paid too much in earlier years, and so should have a contribution holiday and/or a refund in compensation.

My own pension - defined contribution money-purchase - might well be less than if I stay working for my current employer for the next 30+ years: and we have less leeway in this country than you do via a Roth IRA or 401K for active investment management (even for most personal pensions, bar the SIPPs only available to the self-employed or directors):
but I'd rather have 'my' pot clearly earmarked for my own benefit, and choose how it's invested in the meantime, and on my head be it. So long as the company pays the same contribution at the time, and I don't choose to allot the whole amount into Far-Eastern growth funds the year before I retire, it should work out reasonably.

<Hopes he's not at risk of being moderated off yet?>
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