How Unions and Pensions killed GM - good read.

[Decker]

Obviously you dont read. 

These agreements were put into place when GM had a higher market share and the life expectancy was not as high as it is today. 

I agree about the exec compensation, however, the corp. is ultimately ACCOUNTABLE TO THE SHAREHOLDERS, not the workers.  You claim to be a lawyer, surely you took corps in law school correct??

Again, do the damn math, 95,000 people supporting 500,000 only can last so long before it collapses.   

I do read and I do know the industry.

Did it dawn upon you that actuaries, in making their assumptions, take into account market share and life expectancy?  They do.  In fact, that's precisely what they do.  They are paid to make models that take into account those very factors.

In short, you don't know what you're talking about.

[Soul Crusher]

I do read and I do know the industry.

Did it dawn upon you that actuaries, in making their assumptions, take into account market share and life expectancy?  They do.  In fact, that's precisely what they do.  They are paid to make models that take into account those very factors.

In short, you don't know what you're talking about.

Thats hysterical.  Serious Decker, you really did out do yourself on this post.

I guess these "actuaries" were not too bright since GM has lost hundreds of billions of dollars and is in bankruptcy due to a flawed business model.   

   

[Straw Man]

I don't agree with that at all.  Context.  Private retirement plans are one of the three legs of funding one's retirement - Soc. Sec. and private savings also go into the mix.  Most of these pension plans (def. ben. plans) predate the advent of 401(k) plans.

I don't know of any giant company-like GM-that has a benefit forumla that pays 80-95% of a participant's annual (monthly) salary.  Usually the benefit at retirement is less than half of the participant's nominal annual salary.  GM has a formula that uses 1.25% of average monthly base salary.  (Accruals have been frozen for a couple of years now).  When annuitized that's not a huge cost.

Firefighters and police are notorious for gaming the system.  They usually have a benefit formula based on the final 5 or 3 year average.  So guess what?  Guess who's working 3000 hours their last 3 years on the force at top pay?

I'm not saying that DB plans are perfect.  With work, they are superior to DC plans b/c of the emphasis on the security of retirement income versus playing the market chasing some notion of wealth creation.

Social SEcurity is a DB plan.  That's what I'm saying.  It can work.  I know that private db plans are private db plans and that the attendant census data for SS is not the same as private companies implementing a pension plan.

Decker,

I'm sure a DB plan can work and if some company chooses to implement one then that's their business. 

My problem is more with pensions for govt employees.   I just don't think they are sustainable and certainly not a the levels that I see.   

I'll admit my view is certainly biased since I am self employed and get no pension at all. 

[Soul Crusher]

Decker,

I'm sure a DB plan can work and if some company chooses to implement one then that's their business. 

My problem is more with pensions for govt employees.   I just don't think they are sustainable and certainly not a the levels that I see.   

I'll admit my view is certainly biased since I am self employed and get no pension at all. 

Im in the same boat Straw and dont regret it, but I find it amazing how some people cant do basic math. 

If a worker contributes say $50,000 over the life of his employment to a DB plan, yet can retire at 30, 40, 50, 60, 70 percent salary at 55 y/o while the average life expectancy is 75 or better, there is no formula, other than Madoff's, where that can sustain itself. 

Its simply not feasible and doable, from any viewpoint. 

In NY, I posted an article, the pension system is destryoing the state.  Its killing us.   

[Straw Man]

Im in the same boat Straw and dont regret it, but I find it amazing how some people cant do basic math. 

If a worker contributes say $50,000 over the life of his employment to a DB plan, yet can retire at 30, 40, 50, 60, 70 percent salary at 55 y/o while the average life expectancy is 75 or better, there is no formula, other than Madoff's, where that can sustain itself. 

Its simply not feasible and doable, from any viewpoint. 

In NY, I posted an article, the pension system is destryoing the state.  Its killing us.   

I'm fine with being self employed too (I'm really more of a partner than truly SE).  Anyway, I still think it's a hugely unncessary burden to have to guarantee a stream of income to someone after retirement, especially at the level of some government employees.    Just my opinion but I can also see the problem with the math too

[Hereford]

No company or organization that has to pay its' own way is going to agree to pay a majority of salary to people who are retired (i.e., produce nothing).

This is only a big event in union outfits and government work, two places where fiscal accountability is abscent.

[Decker]

Thats hysterical.  Serious Decker, you really did out do yourself on this post.

I guess these "actuaries" were not too bright since GM has lost hundreds of billions of dollars and is in bankruptcy due to a flawed business model.   
  

Defined benefit plans are highly complex.  You've demonstrated no understanding of how they work.  You just point at the result and blame the workers.

I'm not blaming the actuaries.  I'm pointing out that your protests are based in dogma and not fact.

[Decker]

Decker,

I'm sure a DB plan can work and if some company chooses to implement one then that's their business. 

My problem is more with pensions for govt employees.   I just don't think they are sustainable and certainly not a the levels that I see.   

I'll admit my view is certainly biased since I am self employed and get no pension at all. 

Private DB plans are wholly funded by the Employer.  They are part of the bargained for compensation of the workers.  When the employer, who also doubles as the trustee, fails to fund the plan adequately, I'm of the opinion that this is, more or less, intentional.  There's a gov. agency called the PBGC which bails out failing DB plans.  INstead of running a square plan, I'm betting that the ER was counting on a gov. bailout.  After all, GM's pension is too big to fail.  Only problem is is that other companies adopted the same tact.  The PBGC is billions in the hole and now we have this.

I agree with you that DB plans are dead for large companies.

The capitalists in this society wanted to shift the burden of funding one's retirement to the worker.

Mission accomplished.

The capitalists wanted a pliable workforce on an earning level with third world workers.

Mission accomplished.

Security is gone and it's every man for himself more or less.  While that concept appeals to young libertarian men looking to make a stake in the world, that means shit to me.

The death of the DB plan is one more step in the direction of what the wealthy have always wanted: a pliable workforce that works for food.  That is the ulitmate goal here.  Speculation mode over.

[Soul Crusher]

Maybe for some, but many like myself dont want to be stuck at the same job for 30 years. 

I like being able to move, freedom, and mobility. 

What wrong with that?

[Decker]

Maybe for some, but many like myself dont want to be stuck at the same job for 30 years. 

I like being able to move, freedom, and mobility. 

What wrong with that?

Nothing.  I hope you do well.

For a man or woman with children and roots in a community, the pendulum swings toward security over riding the professional range looking for the best offer.

People want secure retirements.  People want secure jobs.  People want security at a certain station in life.

That's no indictment of your will to live as you please.  It's just how things work.

[Deicide]

Nothing.  I hope you do well.

For a man or woman with children and roots in a community, the pendulum swings toward security over riding the professional range looking for the best offer.

People want secure retirements.  People want secure jobs.  People want security at a certain station in life.

That's no indictment of your will to live as you please.  It's just how things work.

Security is an illusion.