... and this is why pension schemes should be managed by the government or at least tightly regulated.
Just imagine GE going bankrupt - who's gonna pay the pension, then? The government in a bailout or what?
Just imagine GE going bankrupt - who's gonna pay the pension, then? The government in a bailout or what?
If your company isn't there when you retire, you don't get a pension.
I find it incredibly risky to rely on pensions. I don't quite understand why employees are so excited about non cash benefits.
They might not be aware that automation has done away with the role of pension fund managers. In the old days, you couldn't just go out and buy a total stock market or bond market ETF. Nowadays, you don't even have to think about asset allocation with target date funds. And since all investments are going towards the fewer and fewer remaining companies, a bailout for one is a bailout for all.
httpss://en.m.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation
https://www.ai-cio.com/news/multiemployer-pension-lifeboat-s...
The idea that someone could lose their retirement and depend on social security or nothing at all simply because the company one has dedicated his life to goes bankrupt is just... horrible.
Unless one happens to work for a religious organization, in which case, yes, I agree, we should remove the religious exemption from needing to contribute to the common insurance fund for defined benefit plans.
What exactly about this idea is horrible? Of course it sounds like socialism but what's the concrete things that are "bad"?
There’s a government supported backstop for pension funds if the company goes out of business.
https://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpo...
It's mostly for show, and at the end of the day, if the pensioners have enough political clout (like those of GM in 2008/2009), then they will get bailed out for real by Congress.
In the UK pensions are independent of the company due mostly to some scandals in the past Robert Maxwell for example.
>If your company isn't there when you retire, you don't get a pension.
It depends. My pension has gone through a couple of different acquisitions but it still exists.
Employers are excited about non-cash benefits because it cuts risk by reducing their overall obligation to their employees.
And they are at least partially insured:
Maybe the PBGC will go under? Who knows.
Taxpayer funded defined benefit pensions have zero regulation. Because they have the power to tax.
And there is a bill currently worming it's way through congress to bailout PBGC (although they don't say it directly):
https://www.govtrack.us/congress/bills/116/hr397
https://burypensions.wordpress.com/2019/01/09/butch-lewis-ac...
Ultimately however you have to trust some third party - to some degree - not to waste or misuse your money.