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Politics : Right Wing Extremist Thread -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Whist who wrote (6293)	3/14/2001 11:52:49 AM
From: thames_sider	Respond to of 59480

payout generally was based on average annual salary X years of service. OK, again a difference. Here the salary level used tends to be the average over the last few years - generally the highest-earning. But, also, far more generous schemes tended to be given to senior employees (director+) who thus had no handcuff (or 'incentive to loyalty') such as applied to more junior staff. And the bonuses to the loyal from final salary are (since the investment pot is not hypothecated) at the expense of those who leave for whatever reason... I can see both sides, I see how loyalty deserves reward - but don't believe it should be so directly at the expense of others. [Especially since the better your pay, the more 'loyal' you're likely to be... thus doubly exploiting the lowest paid]. Why does converting from defined benefit to cash-balance disadvantage the elderly? If the plan is correctly funded, then surely there's still the same amount there? Or is the issue that funding for defined-benefit is 'pay-as-you-go', where the contributions of current workers cover the benefits of retirees? If it's the latter, that's a very dangerous position to be in... any shrinkage in workforce or funding and the scheme risks collapse unless existing members pay far more (for no increased benefits themselves) - so surely it's not. Only governments are stupid enough to run pension schemes that way. Really, they are... it's the default across Europe except for the UK and Netherlands... Still, I don't see why older workers should be penalised particularly by the switch, so long as the funding of their pension was adequate in the first place.