UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75700  
Subject: Re: Traditional pension rant (long) Date: 11/12/2003 11:29 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Greg, I agree that defined benefit plans are not perfect. You certainly hit many of the main points.

But you missed a very important one. That is that the employer or the insurance company worries about coming up with the funds needed to pay those promised benefits. Hence, the system is professionally managed and guaranteed (as far as it goes).

The defined contribution plan offers none of these promises. You are on your own to manage the investment properly and its your problem if there are not enough funds to fit your lifestyle. Hence, it forces people who are not confortable with financial matters to get into them. It makes a living for financial planners, but puts pensions at risk of exploitation by crooks and various rip offs.

The defined contribution plan sounds great when stocks are doing great. They are not so good when the future is uncertain.

There are lots of people out there who have worked very hard for years and years who are destined not to have much of a pension under defined contribution systems. I think they deserve better treatment. Certainly defined benefit plans did very well for the previous generation of retirees.

What are the odds we can come up with something better that Congress will actually pass and business will accept?
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

Back to the Future Buffalo Wild Wings
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement