Post by jeffolie on Jan 5, 2010 14:08:49 GMT -6
Pensions are good. My opinion may not be popular on this forum, but so be it.
Pensions are the safety net for those workers fortunate enough to get one. Pensions are getting rare. Generally now pensions are available for mostly only government and union workers but it did not used to be that way.
Workers came to government after WWII with the expectation and tacit agreement that government workers never made big money and that to make big money they would have to work in the private sector. Workers traded away the potential for high salaries inorder to get mediocre incomes, mediocre health benefits and a fair pension.
Government workers now do better than the prevailing wages and benefits because private workers have suffered to have falling wages, higher private medical expenses and a near absolute abandoment of private pensions. Government workers salaries and benefits have had small increases while private workers have had decreases.
When pensions are now discussed, the comparison is nearly always about how government pensions benefit governmental workers rather than how private workers pensions work at all. Corporate America dumped pensions to help their bottom line by not having to contribute money into their share of them. Few acknowledge that workers have to pay into their own pension funds and merely focused on how pensions were a benefit to employees.
Because it was widely known that the average investor bought high and sold low, pensions provided rewards for job loyalty and longevity while now Corporate America is forcing workers to be investment managers. That is all gone now because workers must suffer the widely acknowledged bad investment performance of crashed IRAs and 401Ks. Americans have been abandoned by Corporate America and must deal with the manipulations of horrible market makers such as Goldman Sachs.
Pensions wrongly get criticized generally. Jealous people belittle pensions. Yes, there are abuses that correctly are criticized but most pensionaires do not get a lot of money.
Almost all media pieces are negative about pensions.
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Pension Disaster Makes States and Cities into Financial Basket Cases
Employees of US states and cities have much better pension plans than do Average Americans and this is creating some serious budgetary problems, one reason to be very careful in assessing municipal bonds, particularly general revenue ones.
A recent FT article puts some numbers on this problem:
The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth...
Under no circumstances should you believe the looming pension crisis is merely a public sector problem. Witness the recent post I wrote on the private sector pension problems and its connection to sluggish hiring. Nor is this only a US problem. For example, recent estimates put the aggregate defined-benefit pension hole at UK companies at £212 billion.
www.roubini.com/us-monitor/258220/pension_disaster_makes_states_and_cities_into_financial_basket_cases
Pensions are the safety net for those workers fortunate enough to get one. Pensions are getting rare. Generally now pensions are available for mostly only government and union workers but it did not used to be that way.
Workers came to government after WWII with the expectation and tacit agreement that government workers never made big money and that to make big money they would have to work in the private sector. Workers traded away the potential for high salaries inorder to get mediocre incomes, mediocre health benefits and a fair pension.
Government workers now do better than the prevailing wages and benefits because private workers have suffered to have falling wages, higher private medical expenses and a near absolute abandoment of private pensions. Government workers salaries and benefits have had small increases while private workers have had decreases.
When pensions are now discussed, the comparison is nearly always about how government pensions benefit governmental workers rather than how private workers pensions work at all. Corporate America dumped pensions to help their bottom line by not having to contribute money into their share of them. Few acknowledge that workers have to pay into their own pension funds and merely focused on how pensions were a benefit to employees.
Because it was widely known that the average investor bought high and sold low, pensions provided rewards for job loyalty and longevity while now Corporate America is forcing workers to be investment managers. That is all gone now because workers must suffer the widely acknowledged bad investment performance of crashed IRAs and 401Ks. Americans have been abandoned by Corporate America and must deal with the manipulations of horrible market makers such as Goldman Sachs.
Pensions wrongly get criticized generally. Jealous people belittle pensions. Yes, there are abuses that correctly are criticized but most pensionaires do not get a lot of money.
Almost all media pieces are negative about pensions.
=======================================================
Pension Disaster Makes States and Cities into Financial Basket Cases
Employees of US states and cities have much better pension plans than do Average Americans and this is creating some serious budgetary problems, one reason to be very careful in assessing municipal bonds, particularly general revenue ones.
A recent FT article puts some numbers on this problem:
The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth...
Under no circumstances should you believe the looming pension crisis is merely a public sector problem. Witness the recent post I wrote on the private sector pension problems and its connection to sluggish hiring. Nor is this only a US problem. For example, recent estimates put the aggregate defined-benefit pension hole at UK companies at £212 billion.
www.roubini.com/us-monitor/258220/pension_disaster_makes_states_and_cities_into_financial_basket_cases