The Pensions

[AlexLah]

You are totally off GH.

[Naam]

You are totally off GH.

GH might be off in the specific case of "12drink" but basically he is pointing in the right direction. any shrink/psychiatrist will confirm that.

[teacup]

Those that still look to depend on their company’s pension are blinded to the truth!!!

Most (if not ALL) pension plans is DEAD, is Over!!!…..there are signs of rapture everywhere, if you care to look.

Like I said before …” Not many companies left that can logically afford to pay more people to not work, than to work.” And we all know when your company got nix - so goes your pension …bye bye.

And most company pensions are part of their book, and if this the case, then…

I think the only way to ensure employee pension plans are protected is ,…that

pension plans should be structured so that pension funds are “moved off” of company balance sheets and held by a third-party custodian, like 401(k) plans.

But the question now is…….who will manage these funds and how?

Until that happens, I would take whatever money you can get now and run. Nobody should be counting on pensions being there anymore.

[teacup]

Just me here

Just most Americans actually. Company pension plans are dinosaurs. People do IRAs/401Ks instead. The trouble is most investors in such plans have lost about half their value in the recent past. That is troubling. Yes, I am one of the losers.

There is no such thing as 401K anymore, only.........201 or 101K nowadays jaa

[Jingthing]

There is no such thing as 401K anymore, only.........201 or 101K nowadays jaa

Too true to be funny.

[473geo]

Agreed Teacup, surely the problem compounded by the first profit protecting method of any major company in a downturn is RIF. This in turn reduces the amount of input into the pension fund. Projected payments are made usually on predicted growth in 'normal' circumstances. Thus in a situation such as this the predictions may be a long way short. I am not sure how the depreciating value of assetts in the funds affects the revenue....I suspect it does.

I seem to recall that the last GSK report I recd 2007 showed a substantial shortfall for provision of year on year predictions, which was to be made up, if I remember correctly, by the company. Will large companies have the resource to continue to support the pension fund? who can say, but less staff mean less revenue for pensions while current outgoings increase. Just look at DHL laying off 7000 in Ohio, more predicted elsewhere.

I don't know about doom and gloom, but are pension funds of these big companies immune to the economic climate at the moment? I would suggest at the very least some 'adjustment' will be made. Perhaps some cash rich funds can take advantage of a downward shift......but the silence is deafening!!!!

[teacup]

There is no such thing as 401K anymore, only.........201 or 101K nowadays jaa

Too true to be funny.

Funny, coz I don't feel any more powerful today than yesterday.......I'm in the same boat as you are and millions out there

and comedy is simply a funny way of being serious.

[Dave the Dude]

Anyway, we shouldn't let any of this get in the way of 12DM's doom and gloom fit - he's only happy when he's miserable.

I think he's here to try to make others miserable too

[flying]

He hasn't got a pension - he took the money out of his pension and threw it at a knackered horse - What he does have is a wish that pensions will collapse so that the rest of us can be in the same mess he's put himself in.

I see so those who busted their a$$ at the grindstone for forty + years & now seem to have lost better than half of that savings through no fault of their own are the same as your pal?

Listen not everyone is financially astute a great many folks believed & followed the supposed dream. Work hard, invest & retire.

Yes perhaps some folks post doom & perhaps that is what they are seeing now. Perhaps the realization is like what Teacup said...

Those that still look to depend on their company’s pension are blinded to the truth!!!

Most (if not ALL) pension plans is DEAD, is Over!!!…..there are signs of rapture everywhere, if you care to look.

How does that feel? I do not know like I said I am not in that group....but I do know if someone came home & found their life had been stolen & the thief was still standing there...................? Well I have a pretty good idea how that person would feel I think 12D's posts reflects that more than the doom & gloom the ostriches claim.

Edited March 15, 2009 by flying

[PeaceBlondie]

I never was in the pension business as a technician, although I once started training to become a life insurance actuary. As I understood the theory then, but not always the practice, a pension fund should have current contributions made by the employee and the worker, and those payments fund the eventual payout. The landmark revision in the USA was ERISA, a federal law in 1976. At that time, some small companies decided to terminate their plans, cashing out their employees. Other companies beefed up their plans to meet stiffer ERISA standards.

But I think the standards for those private pensions were not rigidly enforced. If they had been, then bankrupt airlines would not have been rescued by the PBGC, which then has to pay retired pilots a fraction of their pension. I think the federal oversight by the IRS was never adequate. My friend who is now retired was in the EP/EO division of the for many years, and they had very few certified actuaries checking the private pensions.

Public pensions are often the most underfunded, whether federal (iincluding SS), state or local. And Europe state pensions may be worse than American. They were never intended for current workes to finance the retirees. They are supposed to be self-funding. The problem comes in the investments, as well. Huge state pension plans like CALPERS or teachers' retirement boards have to invest the money, and increasingly were allowed to invest in equities or real estate. Endowments of universities are in the same shape, and some of them gambled their funds on deriviatives, which were riskier than knackered horses. Almost all the Social Security funds have been lent out to the federal government, and yet their actuaries have warned us for over 50 years that the system was not actuarially sound. SS was last reformed in 1986, and is the pooping pachyderm in the parlor.

This subject is more gloomy and doomy than it is cheery. And there is nothing sexy about the computation of actuarial returns.Yet, there will come a day when your pension matters much more than sex. Thank God, I am not there yet.

[PeaceBlondie]

I never was in the pension business as a technician, although I once started training to become a life insurance actuary. As I understood the theory then, but not always the practice, a pension fund should have current contributions made by the employee and the worker, and those payments fund the eventual payout. The landmark revision in the USA was ERISA, a federal law in 1976. At that time, some small companies decided to terminate their plans, cashing out their employees. Other companies beefed up their plans to meet stiffer ERISA standards.

But I think the standards for those private pensions were not rigidly enforced. If they had been, then bankrupt airlines would not have been rescued by the PBGC, which then has to pay retired pilots a fraction of their pension. I think the federal oversight by the IRS was never adequate. My friend who is now retired was in the EP/EO division of the IRS for many years, and they had very few certified actuaries checking the private pensions.

Public pensions are often the most underfunded, whether federal (iincluding SS), state or local. And Europe state pensions may be worse than American. They were never intended for current workes to finance the retirees. They are supposed to be self-funding. The problem comes in the investments, as well. Huge state pension plans like CALPERS or teachers' retirement boards have to invest the money, and increasingly were allowed to invest in equities or real estate. Endowments of universities are in the same shape, and some of them gambled their funds on deriviatives, which were riskier than knackered horses. Almost all the Social Security funds have been lent out to the federal government, and yet their actuaries have warned us for over 50 years that the system was not actuarially sound. SS was last reformed in 1986, and is the pooping pachyderm in the parlor.

This subject is more gloomy and doomy than it is cheery. And there is nothing sexy about the computation of actuarial returns.Yet, there will come a day when your pension matters much more than sex. Thank God, I am not there yet.

[GuestHouse]

And there is nothing sexy about the computation of actuarial returns.

Unless of course the computations are telling you what you want to hear..... How many times have I said it - the most dangerous lies are the lies you tell yourself.

Madoff told lies and people wanted to believe him. Members on this board told lies about returns on investments - perhaps they believed themselves, perhaps others believed them too.

The warning if anyone missed it was not some statement by any insightful money man in 2007 but Enron - Sexy returns and a promise of an easy life.

We discussed the fall out of that here on TV, I (and I am sure many others) met the victims of Enron, thrown back into work in old age.

And right up until the point where the recession was undeniable the message on this board was still - easy money to be made.

Calculating returns on investments that are lower risk and underperforming the Madoffs of this world has always been boring - but here's the rub - Your pension has always been more important that your job (more important than sex if it's funding that too).

I've got news letters from each of my pension funds going back years, frequently the trustees implore members to get involved in their pension, join the pension guide groups and understand how their pension is being managed. And always, always, always the advice not to put all your eggs in one basket.

The ranting of doom and gloom is indeed an emotional response to what has happened - but then how many of individuals' investment choices where an emotional choice based on sexy calculations that told them what they wanted to hear?

[PeaceBlondie]

Indeed, how many folks in pension funds, if they had gotten nearly Madoff returns on their funds, would have said no? But ordinary life insurance without dividends was calculated at 3 percent return. The payoff was that the money would be there, or you could cash out at the contractual net value.

[Nouf]

Personally i think Pensions are a scam, just ask the pension employees & holders of Robert Maxwell, Corp

Governments change the rules yearly, I used to work for a Multi-national company and had a Final salary pension that i will hopefully collect some funds when i retire, but i am not banking on it, As my 60^th birthday is a while yet (that’s even saying i get there???)

Although about 7 years in i actually dropped out, people thought i was crazy, because final salary schemes are guaranteed etc, well they are not guaranteed final salary can be changed as well (in the UK) so again, all is not what it seemed, as they too invest in stocks, so if there is a short fall then they have 2 choices make up the short fall of move the scheme to another less demanding scheme where its run by another operator, even then its no guarantee to meet the projections

I have noticed talking to friends back in the UK, that in order to stay in final salary schemes companies have been asking for more contributions from employees, this is simply because of the projections are out dated and people are living longer and are a liability, and younger members are getting less projections

Final salary schemes are a Ponzi scheme as they rely on younger employees paying for the retirees, only when the schemes 1^st started you used to get say a 1/50^th of the scheme now the younger members are getting 1/70^th x your final salary for each year of your service

Choices of living against saving,

I still save and always try to put money away for a later date (try to use your governments tax free status accounts etc, to help save tax free)

But todays society seems to occupied on years ahead yet seldom seems to enjoy the moment today, people are forgetting balance

If they stopped to think about the money they spend today on useless crap they could have used that money to save for later, but society wants every luxury items under the sun, like the Mercedes and the 5 bedroom mansion

Its no wonder the world system is broke and a few people have Madoff (Sic) with the money

People seemed to dwell on too much that they cannot change and that affects their lives, they simply stop living

I dont have the luxury car or the 5 bedroom mansion, but i have been to places around the world travelling that people will only dream off

I want memories when i die, not regrets

I hated my job, so it was a choice of staying in my job for the next 30 years for the "possible" benefits if i got to 60 or getting out and living life, but because i had a passing interest in financial markets i decided to take up the challenge of investing myself

Rules and liabilities can change, Pensions are just a gamble on a projection, and some wizard in an office projects what you "might" have by the year xxxxx when you come to retire

My objections to Pensions overall is that Society has ingrained in us the fact that we MUST save for the future

Why that is true and i agree, we must also look to living life as well,

There is nothing wrong with that line of thought; only many seem to look forward to retiring where they have the funds to enjoy Life at retirement, only they miss out of the previous 30 or so years of living when they were younger.

The amount of times i have spoken with Older Citizens all over the world where they have regretted not doing things they wished they did in their 30`s & 40`s

Too much regret in this world,

Look at the Example of the UK system if you leave the UK certain countries for UK pensioners you dont get the Annual increases, so you save into a government system yet they screw you over

I think the best possible way is try to diverse, and have a bit of everything, and take control of your finances and that means getting educated, learn about finances and make these choices

To pay someone to make choices via these so called experts, yet these gurus & financial experts are mostly full of BS, and they charge you silly fees, yet some of these so called experts dont know nothing, that most can read and learn,

They give you all the spiel about this and that company, and accounts, but really investing is a Technical gamble, but if enough people believe something is going to go up that investment will go up, likewise in the opposite direction

Not from Valuations but by simply "supply & demand"”

If you take control of your finances if you make a mistake then you have only you to blame, there is nothing worse than getting screwed and trusted someone only to find out they did a Madoff

I will take my chances using my knowledge than some Puke in a Suit giving me some BS, and collecting 3-5% for telling me stuff that has no real relevance

Imo

different rules apply to everyone against your risk

Edited March 15, 2009 by Nouf

[flying]

Choices of living against saving,

I still save and always try to put money away for a later date (try to use your governments tax free status accounts etc, to help save tax free)

But todays society seems to occupied on years ahead yet seldom seems to enjoy the moment today, people are forgetting balance

If they stopped to think about the money they spend today on useless crap they could have used that money to save for later, but society wants every luxury items under the sun, like the Mercedes and the 5 bedroom mansion

Its no wonder the world system is broke and a few people have Madoff (Sic) with the money

People seemed to dwell on too much that they cannot change and that affects their lives, they simply stop living

I dont have the luxury car or the 5 bedroom mansion, but i have been to places around the world travelling that people will only dream off

I want memories when i die, not regrets

I hated my job, so it was a choice of staying in my job for the next 30 years for the "possible" benefits if i got to 60 or getting out and living life, but because i had a passing interest in financial markets i decided to take up the challenge of investing myself

Rules and liabilities can change, Pensions are just a gamble on a projection, and some wizard in an office projects what you "might" have by the year xxxxx when you come to retire

My objections to Pensions overall is that Society has ingrained in us the fact that we MUST save for the future

Why that is true and i agree, we must also look to living life as well,

There is nothing wrong with that line of thought; only many seem to look forward to retiring where they have the funds to enjoy Life at retirement, only they miss out of the previous 30 or so years of living when they were younger.

The amount of times i have spoken with Older Citizens all over the world where they have regretted not doing things they wished they did in their 30`s & 40`s

Too much regret in this world,

Good Post & I agree 100%

I grew up & live in a place that many hope to visit in their life so I saw many of those you described. Folks 65+ who finally *made it*

They were driven around at 55mph in a tour bus too old to really enjoy the beaches or trails or things this place is famous for. Well I guess they can sit by the pool & enjoy the umbrella drinks.

I am not saying there is anything wrong with that but seeing it as I grew up I knew I did not want to do that.

[Jingthing]

Balance, schmalence. In the US at least, I see a vision of millions of elderly baby boomers living on the streets, and the younger generation in economic war with them over resentment of already too much of their hard earned money going to entitlement programs. Sometimes there is a basis of truth behind pessimism.

[473geo]

In my youth I was always envious of the fact that I'd heard in Australia you could take a years break from your employment...then return to employment with the same employer. A great idea. I have proffered to major companies that as a way of increasing employee committment and increasing longivity of employment, perhaps after 5 years service offer a 3 month sabatical.....6 weeks paid holiday salary and 6 weeks leave of absence. Never was taken up!!

[12DrinkMore]

There have been a few comments about my "doom and gloom" posts, in other threads as well.

But, to set the record straight, I am on the whole optimistic about the future of the human race. In my posts I have not tried to portray an economic Armageddon, or the total collapse of society. But I have

either criticised the behaviour, performance and strategy of the idiots and selfish bastards who have somehow reached the position to affect millions of normal Joe Publics.

or

raised questions about the problems where I cannot see where it is all heading and am hoping to open a discussion.

And in this thread I have brought up the topic of the pensions, which concern everybody, but, in the case of Thailand, is specifically of interest because so many have retired here or are intending to do so because they thought that the pension schemes would, after many decades of work and saving, provide them with an inflation proofed income to live in Asia.

So, before you shoot me down, maybe consider your own reasons why you consider my posts to be gloomy? Is it that

1. you are the total optimist and think that Brown, Darling, Obama are going to fix it for the universe

2. you are young enough to think that by the time you are drawing a pension all the problems will have gone away

3. you don't like thinking about it because it gives you a headache

4. you can already see how the problem will be overcome

5. there is not a problem, because the pension schemes have to pay out regardless

6. you don't think that your pension scheme is in difficulty and don't want to consider any other view

And possible a multitude of other reasons

So, please, if you think that my questions raise topics that are too gloomy to think about, then don't think about them. But if you can see how the issues can, or even better, are being solved, then do post.

And in regard to the pension schemes, I still have no reason to be at all confident that any existing pension scheme will be able to fund its current and future liabilities out of its own funds. So what happens next?

[473geo]

I guess the obvious answer to the recovery is a massive tax hike.....thus the people who are in employment pay more for the social support systems and government bail outs.....reducing the earning power

Add to that an uplift of the pension age....

I guess then we are on the way to recovery.....the working man will bail out the economy....and as he will be working longer....even better!!!!

[GuestHouse]

So, before you shoot me down, maybe consider your own reasons why you consider my posts to be gloomy? Is it that.....

Nope... non of the reasons you give.... simply the endless gloom and doom you put out.

[Wrong Turn]

And please, don't be so quick to pronounce the death of defined benefit pension schemes .... I can assure you they are not all dead yet.

Defined Pension Pensions are not dead. They are however, an endangered species on the verge of extinction.

And now, states and other private companies with Defined Pension Benefit programs, are shifting workers into the 401K - half way through the program.

Meaning, if you're 45 for example, and pay into the defined benefit pension since you were 25, for a total of twenty years, they freeze your defined pension and shift you into the 401K. At that age, people cannot recover.

The states are also studying how to shift state workers into 401Ks. Yes, it's true.

[SoCal]

yet their actuaries have warned us for over 50 years that the system was not actuarially sound.

Exactly, so what's the rub? You didn't see the writing on the wall? Maybe I am a different generation (39yrs), but I was always told that the system would be bankrupt long before I would reach the age. As for pension, never been offered one. So I guess I am blessed in that I was never under the delusion that someone else would take care of me.

I saved 30% of my salary in the states, and now 50% in Vietnam. It is all intact, because I don't yet have my "nut." 20 months left to go on that. After that, I might very well get involved in derivatives, or in some other wacky get rich scheme, but only with the money over my nut. Didn't you ever hear that the stock market is organized gambling? Didn't they ever tell you not to gamble your nut?

So much common sense, and so little heeded.

As for me, I plan to ride my current pony until I can't anymore. Then I hope to go into a profession I truly love, and some day many years down the road die at work. Maybe die in a classroom of 14yr old pimpley kids traching them the value of history, as so few really learn from it.

[Jake1]

This raises another point.... On another day, and since we can drag up past discussions from years gone by, we'd be arguing that over any reasonable period of time the stock markets return solid and reliable profits - A few months into an economic recession and all this is forgotten.

If you are young enough, sit back and wait, things will recover. If you are older your pension (and other investments) where surely invested against a risk profile aligned with your age - (refer my previous comments regarding risk profiles and pension fund governance) or are we only experts in hindsight?!

Sudden flash back...... Oh of course, when I was discussing the benefits of risk controlled pensions others where ragging me over the delta being lost between risk managed pension schemes and going it alone on the stock market.....

You can have it both ways on the internet.

How young do you have to be? Adjusted for inflation(not true inflation, gov't calculated inflation) The DOW slipped below it's 1965 levels last week. 44 years of loses and when you sell you get taxed on all of your gains. The DOW also takes the <deleted> companies out of the index so where does that leave you.

[midas]

So, before you shoot me down, maybe consider your own reasons why you consider my posts to be gloomy? Is it that.....

Nope... non of the reasons you give.... simply the endless gloom and doom you put out.

But what were you hoping to read in a thread about Pensions

that would give you more of a warm and fuzzy feeling ?