[FoRK] Chart of the Day...
Ken Ganshirt @ Yahoo
ken_ganshirt at yahoo.ca
Wed Jun 9 16:25:25 PDT 2010
--- On Wed, 6/9/10, J. Andrew Rogers <andrew at ceruleansystems.com> wrote:
> On Jun 9, 2010, at 3:43 PM, Ken Ganshirt @ Yahoo wrote:
> > First, the speculation. I assume you are referring to
> whatever investments the pension fund owns?
> No, even if we ignore the investment aspect of it, which is
> also speculative, there is a large number of other
> speculative assumptions that must also hold true over very
> long periods of time for a pension fund to be solvent.
> It doesn't take much to ruin the whole thing.
> Having a margin of safety for when reality deviates from
> the myriad assumptions in a pension fund is very expensive
> such that most pension funds don't have much of a safety
> margin even when "fully funded". Unfortunately, reality has
> proven to rarely stay within that safety margin. Hence
> why pension funds are either insolvent or inordinately
> expensive for all practical purposes. The track record
> for long-term assumptions built into pension funds is pretty
Okay, let's accept that for the moment. I'm willing to admit that the two plans associated with the company I retired from might well be exceptions. That doesn't make pension plans either scams or ponzi schemes. You still haven't answered why you think they are. And you haven't specified whether it's the defined-benefit plans or the defined-contribution plans you think are the baddies.
If they are all so bad, what do you suggest as an alternative?
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