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|Subject: Re: Proposal to end public pensions||Date: 7/10/2013 11:04 AM|
|Author: steve203||Number: 428347 of 464959|
It still seems the easiest solution would be as one poster here stated a few months ago and require that contributions be fully funded annually
Yes, that is obvious, but such a requirement would be condemned as "intrusive gummit regulations that destroy jobs". Companies like to be able to short the pension fund, or borrow from it. Consider the number of people who had their 401K in the company stock (ie loaned to the company), and lost it when the company went BK.
...but I would be even less of a fan if they made people put their money into a fixed annuity making 1-2% as they do these days.
That's my point about the lack of flexability of the annuity. With a defined benefit plan, the plan administrator can (should) adjust his assumed rate of return as interest rates and inflation change, and payments into the fund can be adjusted accordingly.
Buying an annuity based on today's low interest and inflation rates, when benefits don't even start for 30 years is an impossible gamble. But that doesn't concern the sponsors, because Hatch, and the insurance company honchos, will all be taking a dirt nap by the time the roof falls in.
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