Underfunded Pension Plans- what should be done?

[stevenash]

http://www.fa-mag.com/news/billionaire-former-hedge-fund-manager-funds-pension-fights-18966.html?section=75

[smitty]

http://www.fa-mag.com/news/billionaire-former-hedge-fund-manager-funds-pension-fights-18966.html?section=75

Steve, the answer is simple.  Stop the pensions and go to a 401-K with some sort of a match by the local entities.  Private business' have realized these pensions are not sustainable.  Therefore, they had gone to 401-K's.  Same philosophy should go to the public entities.

[stevenash]

While "tactically shifting a portfolio " sounds very good, it is much easier said than done. Often, the "tacticians" are no better than the non tacticians when it comes to managing money. Most of the time, the markets recognize the shifting economic environment well ahead of the tacticians who, as a result, are unable to take advantage of the shifts. One need look no further than at the number of sophisticated hedge funds that have gone bust - they were supposedly armed with the most brilliant of tacticians. Additionally, in years such as 2007-2009, it didnt matter where you shifted the money, because, other than cash, there was no place to hide. All sectors got hammered.

[shovel]

The answer should be simple, but it is not. I work for a company that has reduced my pension and eliminated it for new hires. While I understand this from a business perspective, you also have to look at this from a retirees point of view. Many of these employees spent the better part of a lifetime earning this pension. To give them anything less than what was promised is criminal.

[stevenash]

Agree- the promises ought to be honored. At the same time, one of the problems is that promises are made without sufficient analysis of the resources necessary to fulfill those promises long term. The federal government is particularly guilty in such instances.

[shovel]

Agree- the promises ought to be honored. At the same time, one of the problems is that promises are made without sufficient analysis of the resources necessary to fulfill those promises long term. The federal government is particularly guilty in such instances.

You said a mouthful there!

[EnlightenedChosenOne]

It's actually pretty easy, but politics (as usual) gets in the way.

While "tactically shifting a portfolio " sounds very good, it is much easier said than done. Often, the "tacticians" are no better than the non tacticians when it comes to managing money. Most of the time, the markets recognize the shifting economic environment well ahead of the tacticians who, as a result, are unable to take advantage of the shifts. One need look no further than at the number of sophisticated hedge funds that have gone bust - they were supposedly armed with the most brilliant of tacticians. Additionally, in years such as 2007-2009, it didnt matter where you shifted the money, because, other than cash, there was no place to hide. All sectors got hammered.

[stevenash]

no politics in these

http://www.valuewalk.com/2013/05/corporate-pensions-most-underfunded/

[EnlightenedChosenOne]

Such is capitalism

The answer should be simple, but it is not. I work for a company that has reduced my pension and eliminated it for new hires. While I understand this from a business perspective, you also have to look at this from a retirees point of view. Many of these employees spent the better part of a lifetime earning this pension. To give them anything less than what was promised is criminal.

[EnlightenedChosenOne]

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[77]

What would you prefer?

[EnlightenedChosenOne]

Companies not screw over their most loyal employees?

Shocking concept I know.

What would you prefer?