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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (45971)	9/18/2010 12:59:08 AM
From: DuckTapeSunroof	Respond to of 71588

Message 26830083

To: TimF who wrote (45971)	9/18/2010 10:25:21 AM
From: Peter Dierks	Respond to of 71588

As the ratio of retirees to workers grows, you can have a problem even if their is money set aside for those retirees. The money has to purchase actual produced goods and services to support the retirees, but with a lower ratio of workers, the produced goods and services may not grow enough to keep up with the extra demand. When a society gets to that point they are in deeper doo doo than that. Pension obligations would likely no be real high on their list of worries. I agree that there is always going to be investment risk in pension funding. Quite often underfunding is the larger problem. Accounting rules require companies to fund their pensions which may require additional contributions when investment returns are low or negative. It appears that many governments operate under different prerogatives than standard accounting rules and regulations.