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I thought that was Bill Clinton that did away with Glass-Steagall, he signed it.
I have learned this concept of three legged stool from the company that I’m receiving my pension from. Before that I was only counting my retirement account.
Glass-Steagall was done away with by the Gramm-Leach-Bliley Act. Three Republicans put it together,
Clinton signed it.
Yes, that is the three legged stool. But you do realize that doing away with Glass-Steagall (a bi-partisan screwing if there ever was one) knocked out the "investments" leg for many and harmed the savers, right?
Glass-Steagall prohibited commercial banks from participating in the investment banking business. I guess you're implying that repealing it brought on all the insane decisions that led to the subprime mortgage crisis, which was a disaster for savers/investors- but only if you sold or were heavily invested in some of the financial institutions that never recovered. If you held on and continued investing new money when the market was at the bottom, you recovered- at least I did.
But- to get back to the pension issue: one complication is Multi-Employer Welfare Associations. There's a large trucking firm HQ near me and they're in trouble because they combined their pension plan with other employers in the trucking industry. Many of those employers are now bankrupt, leaving the remaining employers to cover their own shortfalls PLUS that of the companies that have gone under. So, a bail-out would help the employers still left in the pool but would also protect them from having to pay for the shortfalls of the bankrupt companies.
This issue has been years in the making. Companies are required to have their plans funded based on standards set by ERISA, but the interest rate assumptions used in the valuations have been unrealistically high. (Assuming that the plan will make more generous returns than is realistic makes it look more solvent than it really is and frees the employer of having to add more funds.) Employers have also taken "surplus" money out any time there was an indication the plans were over-funded. Promises have been made to many public employees that would prove to be unsustainable over the long term- but by that time the people who made the promises would be gone.
Glass-Steagall prohibited commercial banks from participating in the investment banking business. I guess you're implying that repealing it brought on all the insane decisions that led to the subprime mortgage crisis, which was a disaster for savers/investors- but only if you sold or were heavily invested in some of the financial institutions that never recovered. If you held on and continued investing new money when the market was at the bottom, you recovered- at least I did.
But- to get back to the pension issue: one complication is Multi-Employer Welfare Associations. There's a large trucking firm HQ near me and they're in trouble because they combined their pension plan with other employers in the trucking industry. Many of those employers are now bankrupt, leaving the remaining employers to cover their own shortfalls PLUS that of the companies that have gone under. So, a bail-out would help the employers still left in the pool but would also protect them from having to pay for the shortfalls of the bankrupt companies.
This issue has been years in the making. Companies are required to have their plans funded based on standards set by ERISA, but the interest rate assumptions used in the valuations have been unrealistically high. (Assuming that the plan will make more generous returns than is realistic makes it look more solvent than it really is and frees the employer of having to add more funds.) Employers have also taken "surplus" money out any time there was an indication the plans were over-funded. Promises have been made to many public employees that would prove to be unsustainable over the long term- but by that time the people who made the promises would be gone.
No easy solution.
Excellent summation, athena. I'm not necessarily opposed to a bail-out, provided it's Wall Street and the banks doing the bailing out. Plus a claw-back from those screwed up and/or hollowed out the companies.
you're correct, living under a bridge isn't exactly the streets.
now in the interest of full disclosure and to repeat your title. NO way in HELL!! would I accept my lifestyle being decimated through no fault of my own to an existence on social security. Now I recognize that many folks currently live in low cost of living areas and can survive on 24K a year.
Here in Philly it is not a life that anyone wants to have for their golden years. AND please remember they did not squander their money, etc etc. they did nothing but go to work for years, pay into their pension plans and do the right thing.
Oh yeah, by all means, yeah let's let them survive on social security.
not to mention the fact that many folks believe (not me) that social security will have to get it's act together. so all these people you are forcing to eke out an existence on social security what happens when that start to have cuts etc?
lol, talk about a case of "hey not my problem, let them starve".
Again, when we stop wasting money on the other stupidity and we start allowing our elected officials live off of social security and medicare, then come to me and say we NOW have a problem.
lastly you make it sound like these retirees are not tax paying citizens? so they are now probably getting doubly screwed.
HUH?? Wow a lot of people here just don't get it. Living under a bridge IS living on the streets.
If we can bail out banks out the wazoo, we can bail out some poor smuck who through no fault of his own is losing the pension promised to him and that he worked for.
Eliza61nyc, what other government programs would you cut to pay for the bailout of the failing multi-employer pensions when their sponsoring companies go under?
This is a different case, since in many cases the companies are bankrupt and gone. We would be funding individual retirements, not making investments.
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