Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (59555)	5/19/2002 10:50:45 PM
From: TigerPaw	Respond to of 77397

Unfortunately, that's not true. Don't confuse the goals of the plan with it's current management. A defined benefit plan is a type of retirement plan in which a certain annuity is assumed. The solvency of the underlying assets do not change the definition of the plan. Changing the operation of the plan, for example making the eventual benefit dependant upon the luck or the choices of the recipient makes the organization of the plan a defined contribution. Again, that says nothing about the solvency, it is a matter of organization. TP

To: Jacob Snyder who wrote (59555)	5/20/2002 9:02:14 AM
From: Gayle Riggs	Read Replies (1) \| Respond to of 77397

Jacob and Tiger Paw, The SS system has one element of a defined benefit plan, but does not have the other essential component. SS promises the benefits, but does not fully fund the program on a current basis. The present value of the benefits promised runs in the many trillions (8 or so?), while the assets are a little over one(?) trillion. If memory serves, some 25 (or more) years ago a federal law was passed requiring public corporations to fully fund their defined benefit plans, yet the feds did not apply the law to SS. (There are still some fudge factors for corporations in funding their plans, one being their assumed rate of return on the assets in the plan.) So, politicians have been able to promise current benefits to "buy" votes without having to face currently the costs of those benefits. Hence, benefits promised inevitably outrun the ability to pay those benefits. These defects in the SS system need fixing now, in my opinion. Gayle