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Investing/Strategies / Retirement Investing
|Subject: Re: Traditional pension rant (long)||Date: 11/12/2003 7:15 PM|
|Author: JAFO31||Number: 37789 of 77568|
Watty56: "The biggest upside to traditional plans that I see was that people were forced to participate."
I disagree. The biggest upside was that the company assumed all investment market risk. Defined contribution plans (like 401-k, IRA, etc.) transfer all the investment risk to the individual employee. Many employees do not want it, and as a result many underperform the market because of thier disinterest (or lack of discipline to form and execute a sound investment plan, instead of avoiding all investment risk with money market/GIC funds (inflation risk) or chasing the hot performer).
In a defined benefit plan, the plan sponsor/company retained that risk.
I tend to agree with your list of downsides.
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