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|Subject: Re: Traditional pension rant (long)||Date: 11/12/2003 7:22 PM|
|Author: buzman||Number: 37790 of 75381|
I agree with what you said but Defined Benefit plans are still better than Defined contribution.
1. Inflation will reduce everyone's buying power. The stock market decline hammered DC.
2. True but it has to be that way. Because you are providing a lifetime income for two people instead of one. It is simple arithmetic.
3. Can't comment. Most of the benefits due accrue in the later years.
4. If #3 is true then #4 is not true.
5. True DB plans favor long term employees.
6. Vesting periods are set by law. What happens is that younger employees benefits accur much lower since they are younger.
7. True the Benefit Guarantee Corp only guaranteed benefits to certain levels plus when companies sold out they were able to consider the pension fund as an asset. However, changes in the law mitigated that ability.
Your post is excellent! But I would counter with why did most companies get away from DB plans? To save money.
Employees were better off with DB plans because the vast majority of Americans are not saving enough money in their DC plans.
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