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How safe are most peoples defined benifit pensions? I understand goverment pensions are very safe but private companies are another thing. I work for a private company, and alot of the recent retires are taking a lump sum versus a monthly stipend, in doing the math, I would have to get around 7% interest on the lump to get what the monthly payments would be. 7% is pretty hard to find right now quarantted..So why take the Lump???
What do you mean earn 7% to break even?
Are you saying you can get 100K upfront vs. 7000/12 monthly?
It depends on your age, since its an annuity calculation. How old are you? Probably the percent is a fair calculation based on your age, you could go online to an annuity calculator to see if you are getting a fair bargain.
A lot of people could have been up the creek if AIG had been allowed to fail.
That is a commonly stated opinion that is not at all true. If AIG went bankrupt, the holders of the credit default swaps would have been out of money. The policyholders would still have gotten paid.
Your money is generally extremely safe with an insurance company. A company that has its worn pension, that goes bankrupt is another story but the FDIC does insure something like 50K per year.
That is a commonly stated opinion that is not at all true. If AIG went bankrupt, the holders of the credit default swaps would have been out of money. The policyholders would still have gotten paid.
Your money is generally extremely safe with an insurance company. A company that has its worn pension, that goes bankrupt is another story but the FDIC does insure something like 50K per year.
Why are you disagreeing with me? You agree with me. I didn't say who would be up the creek, just that a lot of people would be. So the question related to the thread topic of pension safety is. Are any pension funds invested in Hedge funds or other holdings that invest with credit default swaps or any other investment instrument that would have been at risk if AIG had failed? So how is my statement not true? I never said money with insurance companies isn't usually safe so why are you adding that in your response to me as if I did?
emii.com: How Pension Funds Exploit Credit Default Swaps
Credit Default Swaps have received their share of blame for the financial crisis. American International Group’s CDS business not only brought down the insurer but also nearly toppled the financial system. Even George Soros has pronounced CDSs “particularly suspect.”
Why, then, would pension funds consider venturing into the treacherous world of the CDS? The answer is simple: These swaps allow investors to hedge risk and gain easy exposure to credit markets, while offering attractive returns.
Why are you disagreeing with me? You agree with me. I didn't say who would be up the creek, just that a lot of people would be. So the question related to the thread topic of pension safety is. Are any pension funds invested in Hedge funds or other holdings that invest with credit default swaps or any other investment instrument that would have been at risk if AIG had failed? So how is my statement not true? I never said money with insurance companies isn't usually safe so why are you adding that in your response to me as if I did?
Sorry if I misunderstood you. I was thinking that you meant the pension holders or other policyholders would have been "up the creek" if AIG would not have been bailed out.
Just making clear that if AIG went bankrupt the policyholders would still have been paid.
That is one part of the problem but I don't think Illinois like most states is sitting on ton of reserves in their pension fund. I think ( may be wrong ) that they need money to meet near term pension payments. That would mean they would need to keep selling bonds each year to fund their pension contribution and that isn't going to continually happen. I believe the amount they have in reserve is about 20 years of funding and that because of lifespan is a big problem reforming. The link is a state by state summary with a color code indicating the shape they are in
Assessment of Threats to Public Defined Benefit Pensions (http://www.cwapublicandhealthcare.org/pensions/st-pension-threat-levels.html - broken link)
Maybe I overlooked something, but I did not see any legend listing the meaning of each color. One might assume that the red states are in the most trouble financially (pension-wise) and the green states are in the least trouble, but then what about the other colors? And why would Illinois be yellow? And how can we be sure about red and green without any indication? Plus I did not see any explanation of how the assessments were arrived at. This would be a most interesting and informative link if it were properly explained.
Efen within a stae the soundness of pwension vary. Without getting a annual report ;you can't judge the fund accurately. But fewer pansions lss thwe amount of those with 401K s :I would think. Most pensio that were already in trouble were the ones hit hard by this recession but their business model was also already in trouble.
Maybe I overlooked something, but I did not see any legend listing the meaning of each color. One might assume that the red states are in the most trouble financially (pension-wise) and the green states are in the least trouble, but then what about the other colors? And why would Illinois be yellow? And how can we be sure about red and green without any indication? Plus I did not see any explanation of how the assessments were arrived at. This would be a most interesting and informative link if it were properly explained.
I believe they took the chart from another publication. I have seen the map before with the coding explained I will try to find and link if I do. It is out there as I have seen it many times.
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Please help with the color coding.
