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Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
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Quote:
Originally Posted by bobtn
Is the other option better-let pensions bankrupt corps, and kill jobs? With people living decades into retirement and health costs tremendously high at that age, the promises made were unsustainable, and anyone with even an average IQ could see the handwriting on the wall.
So why didn't these well compensated because they are so brilliant C level executives see that handwriting? Or the Board of Directors?
Why didn't the Board insist on properly funding the pension obligations?
The employers should never have made promises they can't keep. The payout should be indexed to interest (or annuity) rates on the pension funds' securities rather than fixed.
So why didn't these well compensated because they are so brilliant C level executives see that handwriting? Or the Board of Directors?
Why didn't the Board insist on properly funding the pension obligations?
They did forsee it in most cases, but they could NOT fund it. The obligation would have liquidated the D3 and most other pension-laden industries decades earlier. Even now, GM's pension is underfunded by several times its market cap value.
Those are the stark choices, as longer legacy killed funding them. Fully fund them, and immediately liquidate, or partially fund them, creating a ticking timebomb.
The solution is to shift to 401ks, which are easily absorbed expenses for the corporate contribution.
Is the other option better-let pensions bankrupt corps, and kill jobs? With people living decades into retirement and health costs tremendously high at that age, the promises made were unsustainable, and anyone with even an average IQ could see the handwriting on the wall.
So you believe it's okay for company x to tell their employees that they will receive x amount, and then years later renege on their promise? I believe a man is only as good as his word (promises he makes), but clearly you support lying then?
[quote=MrWillys;32323711] So you believe it's okay for company x to tell their employees that they will receive x amount, and then years later renege on their promise? /quote]
I believe it is preferable to liquidating an entire corp.
The employers should never have made promises they can't keep. The payout should be indexed to interest (or annuity) rates on the pension funds' securities rather than fixed.
The nature of all employment recruitment, all retail business, and all politics, is to make promises we can't keep. If you don't want to be disappointed, don't trust the hype.
They did forsee it in most cases, but they could NOT fund it.
Dude, they were DEFUNDING pension plans. Change some assumptions about future earnings rates and suddenly you have some tens or hundreds of millions of free cash that you can pull into your balance sheet so as to drive stock prices up. Then you sell and walk off with billions. It's a great plan. Only your employees get hurt. Well, former employees to be honest about it, but who cares about them anyway. Perhaps you missed it, but drain-and-sell was one of the great corporate paradigms of the 1990's.
Quote:
Originally Posted by bobtn
The solution is to shift to 401ks, which are easily absorbed expenses for the corporate contribution.
Sure, that shifts market risk off of small numbers of employers and onto much larger numbers of workers who are not at all well prepared to absorb it. This is a regressive tactic. What would have been groups of professional money managers are replaced by crowds of people who don't know a put from a call. Then you get even more regressive by cutting their wages as well, and then you wonder why aggregate demand starts to weaken. Chickens come home to roost.
So you believe it's okay for company x to tell their employees that they will receive x amount, and then years later renege on their promise? /quote]
I believe it is preferable to liquidating an entire corp.
At least they would have stood by their promises, and prolonged the damage of executive mis-management if that was the result. Clearly it wasn't the workers fault for dedicating themselves to the company. Instead, congress rewarded said mis-management with the Pension Protection act. Jeffery skilling will be getting out soon with his millions. Did he really pay his debt for the lives he ruined?
Yes, let's just pay employees minimum wage from now on. No pension and no healthcare. And if they complain we will threaten to dump them and hire illegals for less than minimum. On second thought, we WILL give them a pension. But you have to be 90 years old to collect. And while we are at it, let's set it up so that the big corporations don't have to abide by OHSA or the EPA. Think of the billions that will save them. Granted a few employees could get injured here and there but what the heck. The companies are not paying for health insurance anyway.....
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