pensions

[miriam_e]

Yep, let's get rid of public pensions because private enterprise is so much better and more reliable. It gives you so much more to look forward to in your sunset years.

As Michael Hart notes in his latest Project Gutenberg Weekly Newsletter:

"The list of billion dollar companies defaulting on their pensions plans is enormous, including Bethelhem Steel, National Steel, Polaroid, Kaiser Aluminum, US Airways, etc.

Billion dollar insolvencies since 1990: Bethlehem Steel, LTV, Wheeling-Pittsburgh, Metals USA, McLoedUSA, Global Crossing, Winstar, Covad Communications, 360networks, ICG Communications, PSINet, Exodus Communications, Lernout & Hauspie & Dictaphone, Safety-Kleen, Laidlaw, The IT Group, Enron Corp., Pacific Gas and Electric Company, Reliance Group Holdings & Reliance Financial, NationsRent, ANC Rental, Burlington Industries, Chiquita Brands, Polaroid Corporation, Hayes Lemmerz, Federal-Mogul, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Lodgian, The FINOVA Group, Inc., Comdisco, Fruit of the Loom, Pillowtex, Warnaco, Kmart Corp., Ames Department Stores, Service Merchandise, Bridge Information Services, Imperial Sugar, The Loewen Group International, Inc., Vlasic Foods, AMF Bowling, Harnischfeger Industries, Inc., Vencor, Inc., Sun Healthcare Group, Inc., Mariner Post-Acute & Mariner Health, Genesis Health & Multicare, and Integrated Health Services."

Comments

[kremmen.livejournal.com]

Very few of those are investment companies. Companies having their own pension plans is rather similar to governments running it. It's not their area of competence, so they are likely to perform poorly.

Anyone whose retirement funds are invested with a competent funds manager, or even just invested in a variety of good stocks, is likely to get a better return than the government. Along with better returns tends to come higher risk, need for diversity, etc. It puts the onus on the individual to take responsibility for themselves, rather than sit back and wait to be looked after. Again, like many other situations, why shouldn't individuals take responsibility for themselves, rather than sit back and naively expect to be looked after?

[miriam-e.livejournal.com]

Again, like many other situations, why shouldn't individuals take responsibility for themselves, rather than sit back and naively expect to be looked after?

Sounds nice in theory, but because we all learn about small parts of the whole and tend to specialise in those, most people won't be able to look after every aspect of the lives.

Do you know how to grow food and could you if it came to the crunch? How much land would you need to plant with grain in order to get you through the year? What else would you need in order to avoid malnutrition? Can you milk a cow? Could you kill the calf so the cow would continue to produce milk? How many chickens do you need to ensure you have enough eggs to manage? Did you know they need to be able to hear a rooster?

Even if you do know these things, you are probably thinking these questions are irrelevant. Of course they are! You and I don't need to look after simple aspects of day-to-day survival because that is what society does when it works properly.

It is very easy to say that people deserve to get a raw deal... unless you are one of those people and you've been working your part of the social contract for most of your life, to be spat out and told that "Oh well, you have only yourself to blame."

I don't recall ever being asked, in any of the jobs I've worked, where I want my superannuation payments to go. But I do know what happened in each case. The banks stole it. I have no superannuation remaining from any of those jobs.

Maybe a public superannuation scheme doesn't perform as highly as some whizz-bang, supercharged investment corporation, but at least the public system would most likely still be there. The high-performers, as you yourself point out, carry high risk.

[kremmen.livejournal.com]

"Society" looking after day-to-day survival is very broad. The way our society works is through specialisation. Companies which specialise in food provide us with food. I wouldn't want the government running the local supermarkets any more than running my finances. (Have a look at government run bottle shops in some US states: High prices and poor selection. Yes, you can be sure they'll be there next week, if that matters to you.)

True that most workplaces haven't asked us where we wanted our superannuation to go, but you can move it out as soon as you leave the place. At the job I was at longest, I was unhappy with the existing super arrangements, so I investigated other options, obtained agreement from management to change, and did a deal with a super company to provide us with negligible fees, as the whole company would shift to using them in that case. However, with personal choice coming in this July, this level of effort should no longer be necessary.