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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (760059)	3/4/2007 2:30:01 PM
From: pompsander	Respond to of 769670

It should choke local government. They have been completely imprudent in promising the benefit levels they don't have the money to pay. The new Pension Protection Act passed last year dealt with the private sector. It's painful medicine, but needed. I disagree about the need for Defined Benefit Plans. They remain the best means of retirement security. To hand over to individuals a chunk of dough and then ask them to manage it to last their lifetime doesn't work. How big an annuity do you think a 65 year old person can guy with $400,000. Shockingly little because the Insurance Company makes the person pay for all the mortality risk...(Answer below) I have been luckey to be covered under a couple of defined benefit plans..thank goodness. How about you? Social Security and the Marine Corp? There's two such plans. Maybe a third from private industry? I hope so. The nasty secret is the passing of risk from private industry to the employee. Privatizing Social Security woudl do much the same thing from government's perspective. Saying our companies can't compete because of pensions is not true...remember, many of the coutries we compete with have state retirement systems far more generous than our Social Security. Many of those nations, like Europe and Japan) pay higher taxes. We chose not to go that way as a society...but what is the obligation to our citizens by their employers? Millions of people will find out in the not too distant future...CEOs matke home millions and million....do they deserve all the retirement plans they have? and, $400,000 cash will buy an age 65 person a lifetime annuity of $1,987/mo for his life only, no spouse protection (this as of June 06 tables). No COLA on that figure. Doesn't sound like a lot to make work...Whereas a $2000/mo lifetime pension for a person age 65 will cost much less in a defined beneit plan, due to the mortality risk being taken by the Plan and the lowered cost of investments and general risk sharing. Sure, Companies done WANT to sponsor these plans...but as a society we should be aware of what we are facing in the future, Lots of folks now on Social Security are getting benefit dozens of times greater than the amount they and their employers paid in during their working lifetime. Same with Medicare. Many are getting lifetime benefits from defined benefit pensionplans. These folks often seem far less tolerant of the generation behind them. The aging of America will certainly result in some interesting debate as this next generation can't afford to retire. ...