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URL:  http://boards.fool.com/hi-jerryab-its-time-to-back-up-the-truck-on-30769656.aspx

Subject:  Re: Proposal to end public pensions Date:  7/10/2013  3:21 PM
Author:  Dwdonhoff Number:  428388 of 459234

Hi jerryab,

It's time to back up the truck on lottery tickets... hell just froze over... you & I just perfectly harmonized & I recced your post!

I am the one who kept saying the cash needs to be paid to employee and let him/her decide what to do with the money. Thus, the municipality does not get involved with the buying anything--because that opens the municipality to future liability of unpaid benefits if the purchased policy fails to deliver for ANY reason.
A defined benefit pension is EXACTLY, and NOTHING BUT, a deferred annuity. Exactly the financial product an entire highly competitive insurance industry has mastered, and is held to high standards of stability, liquidity, and statutory reserves to back up their promises.

Having employers try to directly pretend to be, and act as, annuity providers is as insane as those same employers offering health care coverage by giving inhouse surgery. Further... as we can see in clear current evidence... these "wannabe" employer/annuitors have no equivalent functional reserves, and are not held to any of the equivalent standards of compliance.

Its actually slightly astounding the public has swallowed it, to date!

It costs the govt MORE now because the relatively high cost of managing each individual retirements account must be paid by the municipality as part of the "total compensation package".
Yep yep yep....

You'd think our municipal, state & federal governments might have evolved from the feudal era *at least* up to the industrial era... with improved quality and quantity from economies of scale, and divisions of labor... But in employment benefits, they're literally still stuck in "the economic dark ages."

Painful lessons to ensue...
Dave
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