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URL:  http://boards.fool.com/a-defined-benefit-pension-is-exactly-and-nothing-30770833.aspx

Subject:  Re: Proposal to end public pensions Date:  7/11/2013  11:10 AM
Author:  jerryab Number:  428480 of 458913

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.

Agreed--to a point. When the markets collapse, then the insurance industry loses a fair number of participants--and many people lose some/most/all of the benefits they had earned but will not be paid. PBGC is a prime example for corporations.

As stated, the key point is ONGOING funding for future liabilities if the money is NOT paid to the employee(s) when earned. That is the reason for companies and government to go broke. They are unable or unwilling to fund the cost of deferred liabilities.
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