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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (58506)	5/4/1999 4:00:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 132070

It's not just companies. Millions (I think it's millions) of non-profit employees who contribute to TIAA-CREF have the option to switch their entire pension contributions to stock funds, and many of them are 100% in equities. Some have been extremely lucky. Those who have switched out and into a fixed annuity for the rest of their lives in the last year or two (as did my next-door neighbor, who knows and cares nothing about economics or individual stocks)are very well fixed. Their incomes are well above what they were making befgore they retired. But those who are presently about ten years from retirement and who are 100% in equities may be terribly disappointed. There are some very complacent persons aged 50-60 in the educational system. They were badly frightened last fall, but gleeful since then, and still confident that 15-20% increases in their accumulations will continue to the limits of their working horizons.

To: Freedom Fighter who wrote (58506)	5/4/1999 4:15:00 PM
From: IceShark	Read Replies (2) \| Respond to of 132070

Wayne, the shift from defined benefit plans to defined contribution plans and then 401k plans really began in earnest back in the early 80's as people started to notice Honeywell's new 401k plan, which I'm pretty certain was the first ever. And the reason for the shift was two fold: 1) another way to bump up nontaxable compensation for higher level employees, 2) a cheaper cost retirement substitute for employees. In most cases #1 was initially the real reason. But due to discrimination rules, employer matches were tossed in to lure more employees to participate and meet the discrimination rules. As time went on #2 became the primary reason. Not because of asset inflation reasons - it was just cheaper. As for current motivations and asset bubbles making defined benefit plans risky to the companies, well that may or may not be, depending on the plan. Some of these plans are so over funded you wouldn't believe it. The 401k die was already cast before this bubble happened so your theory is moot from a practical standpoint. An interesting point you may wish to run with is that in the mid 90's the Fed Pension Regulator boyz and girlz were worried sh!tless about under funding of defined benefit plans and the possible cost to the Feds if plans went bust. Another reason the gov't would just as soon see equity prices remain high. -g- Bears are DOOMED. Regards, Ice

To: Freedom Fighter who wrote (58506)	5/4/1999 5:38:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Wayne, I think that is part of the problem. The other problem was the fact that jobs are no longer expected, by either mgt. or labor, to be lifetime affairs. A huge pension infrastructure probably doesn't make sense. And, of course, you have the problem that so many pension plans have been places where rip offs have occured. There is no doubt that Generation X will be mostly street people at retirement. But I'll be rich enough by then to hire goons to shoo them away from my Bentley. <g>