Posted on 11/12/2008 5:21:11 AM PST by Libloather
The rise and fall of the 401(k)
Mike Ivey — 11/12/2008 5:36 am
**SNIP**
The State of Wisconsin Investment Board, for example, manages the retirement funds of more than 550,000 current and former government workers in the state. It is widely respected as one of the best public pension funds in the nation.
In Wisconsin, monthly pension payouts to retirees are calculated based on five years of market returns, which helps to smooth out the inevitable ups and downs of Wall Street. Even with the unprecedented stock market decline of 2008, participants in the Wisconsin retirement system are likely only looking at a 3 percent cut in their monthly checks beginning in May 2009.
"That's the beauty of the system," said SWIB spokeswoman Vicki Hearing. "It's about sharing the risk and spreading it among thousands of people."
Unfortunately, fewer and fewer workers enjoy the benefit of a company-managed pension.
Corporations have been doing all they can to shed their pension obligations, which have proven a tremendous financial drain in particular on the U.S. automobile and airlines industries. The company pension is often the first thing to go when a firm starts making cuts or declares bankruptcy.
At Madison Gas & Electric, ending the company pension was the major issue in negotiations over a new contract in 2006 with the International Brotherhood of Electrical Workers.
MGE officials were determined to replace the company pension plan with a 401(k)-type plan for new hires. On that key point, the company refused to budge and the union had to go along.
"We weren't alone," said Dave Poklinkoski, president of IBEW Local 2304, which represents about 250 MGE workers. "Pension plans are under attack all across the country."
(Excerpt) Read more at madison.com ...
Doesn't this look like what we need, a nice juicy target like Guantanamo, and fairness doctrine? Pelosi has been very careful NOT to try anything crazy 2007-2008 that wasn't poll tested. We actually NEED them to try some crazy stuff to start the fall of the messiah. To 1993!
Bookmarking for later. Thanks.
they will take all the 401K money out of the Market.......(sorry, deletion problem)
Turning your 401(k) into Social Security. Surprise, Obama voters.
They can't do that. They can take it out of the stock market, but then it will be put into the bond market, where inflation and interest rate risk will eat away at it.
Is the bond market not Government?
A fitting typo.
I love the phrase "pre-tax ... will be taxed". War is peace. Freedom is slavery. Obama is good.
My guess on the outcome:
1. Whether or not they go ahead with stealing from the rich to give to themselves, the Democrats just killed investments in 401(k)s. I will not be sending money to an account marked for confiscation this year, and I suspect I have company in that respect. I wonder if that was part of their goal - create a crisis in savings so they have an excuse to grab more money "for our own good".
2. If they take our retirement accounts, quite a few responsible people will resent the theft enough to actively resist Obama and his national socialists.
They said they would invest in government bonds, now how buys government bonds, why pension and money market managers. So, if the government takes the money they use to buy bonds, who is left to buy bonds.
Government logic at work.
No. They issue bonds, and sometimes buy and sell for their own account. But, in so far as there is net issuance of bonds, they are borrowing. Their bonds trade in the market, just as, say, GM's or ATT's. The difference is that the government bonds are (or have traditionally een)considered free of default risk, so they carry lower interest rates for a given maturity But they still go up and down in value because private investors buy and sell them.
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