3 ms·
Why? I can think of multiple reasons. Some essentially boil down to human nature - short-term thinking, preferring politicians who make rosier promises ("assum
by RestlessMind 8y ago
Why? I can think of multiple reasons.
Some essentially boil down to human nature - short-term thinking, preferring politicians who make rosier promises ("assume high rate of return on pension investments and lower the taxes") against honest politicians ("increase taxes since current levels are unfunded"), etc
Some are about societal changes no one can honestly predict - avg lifespans increasing (avg life expectancy in the US was 61 when social security was enacted), pensions were promised in 70's / 80's before globalization wave hit forcing Western companies to either die or compete with leaner overseas firms, internet and e-commerce bringing b&m retail apocalypse, etc.
To find out true cost of funding a pension, try buying an annuity for the similar level of monetary coverage where seller has to do more due diligence. And that will show you the true cost, and my guess is that there is very little appetite to bear that cost in our society.
- grogenaut 8y agoI imagine it’s a lot like any other cash flow issue. It’s in no ones best interest to halt the company the instant it can’t meet its obligations by $1. You get a loan instead. But when do you halt the company?
- Retric 8y agoCompanies don't have a choice to pay their electric bill or not. They are given a choice to pay their workers via under funding pensions. Shockingly the second causes more problems, because companies will take out a loan to fund the first but quietly under-fund the second for years until a small problem becomes a huge one.
- RestlessMind 8y agoWhy not go the free-ish market route (with politically acceptable regulations like creditor protections) and let the owners decide how/when to halt the company?
- grogenaut 8y agoThe answer seems to be never halt the company in most cases, just split it up and write off parts. When did yahoo end?