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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (48438)	4/27/2000 6:35:00 PM
From: Paul Moerman	Read Replies (1) \| Respond to of 99985

Haim, I work in an HR Dept and am quite familiar with retirement plans. IBM's plan is a defined benefit plan, which mean the employer takes the investment risk and the employee is guaranteed a benefit calculated by means of a formula (typically based on average pay, length of service, and age at retirement). If an employer is lucky enough to have several years of above normal investment gains, the employees have no right to the spoils. Because if and when it goes the other way (investment returns are below "normal" for some period of time), the employer may well have to cough up additional money to keep the plan's accrued benefits adequately funded under the law. Employees are not at risk should that happen. I seriously doubt that employees were asked to ever take lower pay in order to have that retirement plan. The fact is that large employers typically have to offer such a plan to be competitive in their benefits package and attract/retain employees in a tight labor market. I think your characterization of IBM as the bad guy is oversimplified and misleading - not intentionally I'm sure. :-) Back to lurking.