Posted on 07/26/2005 12:00:33 PM PDT by summer
its hard to level the playing field with countries whose living standard is far lower then the US, and who play games with trade and their currencies to give themselves an advantage, while our government does nothing.
The old defined benefits pension plans are killing companies like GM right now. Right around 2016, the baby boomers will start retiring. They will be forced to extract money from their defined contribution plans so the government can tax it. At that point, the huge piles of money accrued by defined contribution plans will start drying up. Stocks will get thrashed severely. ERISA was a big win for corporate pension plans, but it is going to be a major disaster in about 10 years.
People who are employed in the post 2016 time frame are going to have to think very hard about where to put a defined contribution. A tanking stock and bond market won't be real attractive.
you are missing the point - most of these large companies offered BOTH plans - a defined benefit pension and a 401K.
well, at least you are honest in noting that private sector retirees in the future will be taking a major standard of living hit because of this. public employees will still be just fine of course.
honest = reality
I plan on working forever...don't understand the idea of not working....
Well,if this trend continues, maybe the gov't can require a matching contribution to the privatized SS accounts in lieu of 401k contributions.
right ... do you still live with your mother at age 55 too?
You aren't naive, but I'm afraid a lot of people on this board are suffering from the same entitlement mentality that infests the DU board. It is not the employer's responsibility to take care of employees. Free market forces in the workforce operate the same way as free market forces in general. Supply versus demand will determine wages, benefits, working conditions, etc. If you don't think you're paid what you're worth, or if you think your employer is treating you like garbage, then take your talents to somebody who will appreciate them and pay for them. Or better yet, start your own business and compete. America is the land of opportunity, not the land of free rides.
Dear oceanview,
No, I'm not missing the point. The introduction of defined contribution plans pretty much sealed the long-term fate of defined benefit plans. The problem is that defined benefit plans are a less-efficient use of compensation resources than defined contribution plans, and so ultimately, the more efficient type of plan had to drive the less efficient out.
sitetest
If it wsan't for third-party paying, medical expenses COULDN'T be generally unaffordable - except to the extent that we all want state-of-the-art-immortality-care. Any money that goes into the health plan doesn't go anywhere else.
As for housing prices, prices are rising because there is more money available to buy them. When money becomes more limiting, prices will quit rising. Right now home ownership is rising.
Big companies tend to favor Universal coverage here too...because they've promised it already. It's no real advantage to smaller companies, but it's a boatload of advantage to have employees do service for a benefit and then in the end have someone else pay for it - not because it's better overall.
that is indeed happening to some friends of mine now. the traditional pensions were taken, now the company matching contribution to the 401K is "optional" based on the whims of management. 5 years from now, it will be gone, all the 401K money will come from your wages alone. the desire for higher compensation for the executives is insatiable, and so long as they can export jobs to foreign low cost labor centers with no penalty, the downward spiral will continue.
I agree with you last sentence completely. any politician who can tap into this, will win in a landslide.
This is a good point. And I have advised engineers worried about losing their jobs to outsourcing to consider defense work.
Lockheed did outsource some precision parts to the missile I worked on to Mexico. The result was that we had to slip the delivery and make the parts ourselves after the Mexican parts failed several tests and did not fit. Outsourcing is not always going to be the solution that some companies hope.
And before you start thinking everything is better in the defense industry, remember that this work has a history of moving around the country as bids are won and lost. (And as administrations change, because they do play favorites.) It is highly likely that a defense contractor will suffer job dislocation similar to others in the country who lose their jobs for various reasons. Outsourcing, changing technology (who uses flopy disks these days), bad management, plant closures, etc. No one should expect a job that is totally risk free. I was laid off as a teacher after ten years, and laid off by Lockheed two times in my career. You just have to keep up with the technology and be willing to relocate if you plan on staying employed.
RE your post #55 - Thanks.
I was a "synergy" line item when Compaq bought Digital. Compaq bought Digital who was then bought by HP. I'm still bitter and wont buy either Compaq or HP. I had a similar situation with Allied Signal < Honeywell < GE. Hubby works in the banking industry with similar consolidation.
I'm glad I cashed out my pension when I left Digital. It wasn't much, but it's mine now and wont be in jeopardy as some Slick pads his nest off the sweat of the workers.
BTW, I now work for an insurance company that has been sold twice in 4 years. What company do I work for? It doesn't seem to matter anymore.
What was I boycotting again?
Yes - the thing I really like is keeping money away from the Feds. Hm...who needs it more? Me or the wacko spenders in D.C. :)
You are probably right, but I believe this to be bad investment by these large companies. When I hired on at Boeing, it was long enough ago that I get retirement - which will be about $1800 per month after 30 years service. I think if I had taken full advantage of the 401k package for those 30 years, I would have a lot more than $1800 a month (in just interest alone). And I would have a nice-sized wad of cash sitting in the back for my heirs.
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