March 30, 201313 yr Here's an obviously slanted point of view: Pensions Vs. 401K's: Why Pensions are Going Extinct I'm very lucky that I have both at FedEx, besides a Roth that I contribute to.
March 31, 201313 yr I've heard that argument too and while it had definitely added to the problem a defined benefits program just doesn't work. You can't have someone pay into a system for 20 year then pay them back for 40 years. Defined benefit pension plans work just fine, thank you, if companies etc. fund them properly. Such plans pay out according to a formula: years of service times average salary times a multiplier. Hence, I'm confused as to how someone could "cheat" the actuarial system by collecting defined benefits for 40 years after retirement. Retirees who drop dead of a heart attack at age 60 are "cheated" at the other end of the spectrum.
March 31, 201313 yr The problem with the pension system in KY is the legislature failed to fund their end of the bargain properly for decades thus leaving this mess. In other words, we had a great thing going until the unethical politicians ruined it.
March 31, 201313 yr The problem with the pension system in KY is the legislature failed to fund their end of the bargain properly for decades thus leaving this mess. In other words, we had a great thing going until the unethical politicians ruined it. You are correct, but I think "unethical" might be too harsh. Lots of states, lots of companies face similar today because they didn't plan adequately (or just rolled the dice) in terms of market downturns. Another factor, of course, is that more retirees are living longer, and not all companies/governmental entities have actuarial formulas that reflect this.
March 31, 201313 yr You are correct, but I think "unethical" might be too harsh. Lots of states, lots of companies face similar today because they didn't plan adequately (or just rolled the dice) in terms of market downturns. Another factor, of course, is that more retirees are living longer, and not all companies/governmental entities have actuarial formulas that reflect this. We disagree on that. The KY politicians knew all along they were not doing their part and their solution was to raise the rates on the cities and counties over and over.
March 31, 201313 yr I paid into a defined benefit plan for 38 years and so far have collected 9 seems fine to me .
March 31, 201313 yr Defined benefit pension plans work just fine, thank you, if companies etc. fund them properly. Such plans pay out according to a formula: years of service times average salary times a multiplier. Hence, I'm confused as to how someone could "cheat" the actuarial system by collecting defined benefits for 40 years after retirement. Retirees who drop dead of a heart attack at age 60 are "cheated" at the other end of the spectrum. That's why every private sector has or is doing away with them and just about every level of government in the country is going broke or is broke because of them. Your right though they work just fine. And not sure why you using "cheat" in you post like I said that. No where did I use the word cheat.
April 1, 201313 yr Defined benefit pension plans work just fine, thank you, if companies etc. fund them properly. Such plans pay out according to a formula: years of service times average salary times a multiplier. Hence, I'm confused as to how someone could "cheat" the actuarial system by collecting defined benefits for 40 years after retirement. Retirees who drop dead of a heart attack at age 60 are "cheated" at the other end of the spectrum. The KY state government defined benefit plan can definitely be "cheated" when someone works for years at "X" salary and then gets a job for "4X" the salary at the last of their career. Their retirement would be based on their "4X" salary the same as if they earned the "4X" salary their entire career and paid into the retirement system accordingly!!
April 1, 201313 yr The KY state government defined benefit plan can definitely be "cheated" when someone works for years at "X" salary and then gets a job for "4X" the salary at the last of their career. Their retirement would be based on their "4X" salary the same as if they earned the "4X" salary their entire career and paid into the retirement system accordingly!! You're correct, such abuses do occur. Stories of cronies of the school superintendent who end their careers as supervisors at the bus barn at $100 grand a year, etc. Most of my personal knowledge lies in the private sector, and in the past 15 or so years we've seen an exodus of defined benefit plans into defined contribution (401k) plans. That's good for Big Business but bad news for the common working man/woman.
April 1, 201313 yr Author The problem with the pension system in KY is the legislature failed to fund their end of the bargain properly for decades thus leaving this mess. In other words, we had a great thing going until the unethical politicians ruined it. Change unethical to spineless and you have it. They simply didn't have the stones to implement the recommendations presented to them year after year after year.
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