SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : View from the Center and Left
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: richardred who wrote (485)6/9/2005 9:07:48 PM
From: Peter Dierks  Read Replies (2) of 541472
 
The pension problem is large for American rust belt union shops. For years they produced what the country and the world needed. Companies were producing large profits and the union bosses used the threat of strike to feather their nests and negotiate better contracts for their employees.

IBM got bad press a few years ago when they converted employee pension benefits from defined benefit* (DB) to defined contribution* (DC),

I think the steel industry has mostly shed their retiree benefits. When the current worker to retiree ratio approached 1 to 1, large retiree benefits became impossible (in a globally competitive market) to sustain.

Industrial age benefits were appropriate for a population expecting to getting cared for on their own farms by their family and the doctor they had known much of their lives. We now need to find a way to make changes appropriate to transition from a plan that worked in the past to one that will work in the future.

Peter

* DB - benefits are calculated based on something like wages earned. Employer absorbs investment risk. Some retirees die young leaving more investments to cover those who live longer.
* DC - contribution is calculated based on some factor such as current wages. Employee absorbs investment risk and risk of outliving their benefits.

My original DBlend idea: Use forced DC plans and pool a portion of retirement assets so that those who die young can help finance those who might otherwise outlive their assets.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News