5 ms·

Maybe environmental and retirement liabilities should be treated like student loans so you can't escape from them in bankruptcy?

onlyrealcuzzo 7y ago
Companies shouldn't be allowed to offer pensions. They also should be forced to fund government mandated liabilities. Companies don't have a good track record of lasting more than 60 years. It's only a matter of time before they go bankrupt. And when bankruptcy is a way of shedding your pension obligations, they'll go out of their way to go bankrupt to shed it.
- maxxxxx 7y ago
  I guess it would be better if there were independent pension funds that are regulated accordingly.
  - dev_dull 7y ago
    Such as an employee sponsored 401k?
    - deleted 7y ago
      [deleted]
    - maxxxxx 7y ago
      I wouldn't mind a defined pension. It's easier to plan for and also I think more efficient. With a 401k you have to save up a boatload of money just in case. If you live too long you may run out of money, if you don't live long, then you have a lot of money left. So it seems to me that it would be better to average it out over a lot of people. Pretty much the same as with health insurance where one people will need more, some people will need less so it's better to average out out over a large number of people.
      - seanmcdirmid 7y ago
        Public pensions like the ones in Canada would be nice. From both the worker and government perspectives, they provide a lot of stability and can be planned for. Of course, it won't happen in the USA, I think, sounds too socialist for many people on the right.
        Consultant32452 7y ago
        I'm not familiar with Canada's public pensions. Do you know the difference between them and US social security?
        Scoundreller 7y ago
        I’m not sure what he’s talking about. We have a social security equivalent, and then you may have an employer pension. Private companies have mostly stopped their pensions. Government employees usually have pensions, and they’re very well managed.
        seanmcdirmid 7y ago
        https://en.wikipedia.org/wiki/Canada_Pension_Plan https://en.wikipedia.org/wiki/Canada_Pension_Plan
        a-priori 7y ago
        We have basically three programs to provide income to retirees: 1) Canada Pension Plan, a worker-funded defined benefit pension managed by the government via an arms-length investment board. 2) Old Age Security, a guaranteed income program for everyone 65 and older. 3) Registered Retirement Savings Plan, an income tax sheltering program where you can contribute up to 18% of your income into registered accounts and have the contributions deducted from your taxable income. This gets drawn down during retirement for income.
        refurb 7y ago
        What public pensions? Canada has the same setup as the US, and in fact, the US Social Security is a larger program per capita than Canada’s (I.e. high payouts).
    - PretzelFisch 7y ago
      There are unions that offer their members pensions. These pensions are regulated.
- wahern 7y ago
  Unlike government entities, private companies are legally obligated to keep pensions fully funded at all times. And they're also required to pay a fee into a federal agency designed to cover the costs of the federal government bailing-out failed pension funds. There are ways that companies can and do game the system. For example, during a merger the company might claim that the combined pension fund is overfunded and then stop making payments until the supposed net liability returns to 0. The "excess" funds often find their way into executives' pockets as bonuses, compensation for the several quarters where the company's ledger miraculously showed unexpected profits. There are problems that need to be resolved, but they're resolvable. Private pensions can work, and have worked. Don't believe the rhetoric about pensions--it's largely driven by executives trying to raid pension funds. Executives don't like them because as compared to 401(k)s the ratio of executive compensation to worker compensation is lower. There are federal rules that require workers receive the same benefits as executives, and for various reasons executives will come out ahead with 401(k) packages. The book Retirement Heist by then WSJ investigative journalist Ellen Schultz explains all the gory details. Municipal pensions are irreparably broken, though, precisely because the federal rules regarding funding don't apply to them.
- dreamcompiler 7y ago
  Most private companies don't offer pensions anymore (for new employees) because companies don't like them. One reason is that pensions incur risk to the employer, while a 401k shifts the risk to the employee.
  - lotsofpulp 7y ago
    Until the cash is in the employee’s accounts, the employee is still at risk of not getting paid due to bad investment returns or the employer going under. And it’s not like the pension fund is doing any better than any other index fund the employee can invest in.
    - Scoundreller 7y ago
      Pension plans may not be able to get better returns, but they can specifically balance their assets and liabilities better by picking specific investments and/or buying/operating private companies. An index fund will underdiversify by only selecting public companies, and over-represent companies with short-term interests (the total opposite of a pension plan!). The underdiversification or index funds is a particular issue ex-US where stock markets only represent a few sectors. Pension plans can sure screw up, but they can also be unbeatable.
      - lotsofpulp 7y ago
        They all have short term interests, since the people doing the investing aren’t going to be around for the whole ride. In theory, defined benefit pensions are great, but in practice I haven’t seen any evidence that they have sufficiently superior performance to make up for the possibilities of bad investments, corruption, etc.
        Scoundreller 7y ago
        Here are two major Canadian ones that seem to be doing a good job: https://www.otpp.com/ https://www.otpp.com/ https://hoopp.com/ https://hoopp.com/ They’re actually overfunded and have been (carefully) increasing benefits.
- robocat 7y ago
  Except most counties also use a variety of techniques to avoid promised pension payments. The techniques are just very different methods than how companies in many countries have defrauded their employees on pension liabilities.

onlyrealcuzzo 7y ago

Companies shouldn't be allowed to offer pensions. They also should be forced to fund government mandated liabilities. Companies don't have a good track record of lasting more than 60 years. It's only a matter of time before they go bankrupt. And when bankruptcy is a way of shedding your pension obligations, they'll go out of their way to go bankrupt to shed it.

maxxxxx 7y ago
I guess it would be better if there were independent pension funds that are regulated accordingly.
- dev_dull 7y ago
  Such as an employee sponsored 401k?
  - deleted 7y ago
    [deleted]
  - maxxxxx 7y ago
    I wouldn't mind a defined pension. It's easier to plan for and also I think more efficient. With a 401k you have to save up a boatload of money just in case. If you live too long you may run out of money, if you don't live long, then you have a lot of money left. So it seems to me that it would be better to average it out over a lot of people. Pretty much the same as with health insurance where one people will need more, some people will need less so it's better to average out out over a large number of people.
    - seanmcdirmid 7y ago
      Public pensions like the ones in Canada would be nice. From both the worker and government perspectives, they provide a lot of stability and can be planned for. Of course, it won't happen in the USA, I think, sounds too socialist for many people on the right.
      - Consultant32452 7y ago
        I'm not familiar with Canada's public pensions. Do you know the difference between them and US social security?
        Scoundreller 7y ago
        I’m not sure what he’s talking about. We have a social security equivalent, and then you may have an employer pension. Private companies have mostly stopped their pensions. Government employees usually have pensions, and they’re very well managed.
        seanmcdirmid 7y ago
        https://en.wikipedia.org/wiki/Canada_Pension_Plan https://en.wikipedia.org/wiki/Canada_Pension_Plan
        a-priori 7y ago
        We have basically three programs to provide income to retirees: 1) Canada Pension Plan, a worker-funded defined benefit pension managed by the government via an arms-length investment board. 2) Old Age Security, a guaranteed income program for everyone 65 and older. 3) Registered Retirement Savings Plan, an income tax sheltering program where you can contribute up to 18% of your income into registered accounts and have the contributions deducted from your taxable income. This gets drawn down during retirement for income.
      - refurb 7y ago
        What public pensions? Canada has the same setup as the US, and in fact, the US Social Security is a larger program per capita than Canada’s (I.e. high payouts).
  - PretzelFisch 7y ago
    There are unions that offer their members pensions. These pensions are regulated.
wahern 7y ago
Unlike government entities, private companies are legally obligated to keep pensions fully funded at all times. And they're also required to pay a fee into a federal agency designed to cover the costs of the federal government bailing-out failed pension funds. There are ways that companies can and do game the system. For example, during a merger the company might claim that the combined pension fund is overfunded and then stop making payments until the supposed net liability returns to 0. The "excess" funds often find their way into executives' pockets as bonuses, compensation for the several quarters where the company's ledger miraculously showed unexpected profits. There are problems that need to be resolved, but they're resolvable. Private pensions can work, and have worked. Don't believe the rhetoric about pensions--it's largely driven by executives trying to raid pension funds. Executives don't like them because as compared to 401(k)s the ratio of executive compensation to worker compensation is lower. There are federal rules that require workers receive the same benefits as executives, and for various reasons executives will come out ahead with 401(k) packages. The book Retirement Heist by then WSJ investigative journalist Ellen Schultz explains all the gory details. Municipal pensions are irreparably broken, though, precisely because the federal rules regarding funding don't apply to them.
dreamcompiler 7y ago
Most private companies don't offer pensions anymore (for new employees) because companies don't like them. One reason is that pensions incur risk to the employer, while a 401k shifts the risk to the employee.
- lotsofpulp 7y ago
  Until the cash is in the employee’s accounts, the employee is still at risk of not getting paid due to bad investment returns or the employer going under. And it’s not like the pension fund is doing any better than any other index fund the employee can invest in.
  - Scoundreller 7y ago
    Pension plans may not be able to get better returns, but they can specifically balance their assets and liabilities better by picking specific investments and/or buying/operating private companies. An index fund will underdiversify by only selecting public companies, and over-represent companies with short-term interests (the total opposite of a pension plan!). The underdiversification or index funds is a particular issue ex-US where stock markets only represent a few sectors. Pension plans can sure screw up, but they can also be unbeatable.
    - lotsofpulp 7y ago
      They all have short term interests, since the people doing the investing aren’t going to be around for the whole ride. In theory, defined benefit pensions are great, but in practice I haven’t seen any evidence that they have sufficiently superior performance to make up for the possibilities of bad investments, corruption, etc.
      - Scoundreller 7y ago
        Here are two major Canadian ones that seem to be doing a good job: https://www.otpp.com/ https://www.otpp.com/ https://hoopp.com/ https://hoopp.com/ They’re actually overfunded and have been (carefully) increasing benefits.
robocat 7y ago
Except most counties also use a variety of techniques to avoid promised pension payments. The techniques are just very different methods than how companies in many countries have defrauded their employees on pension liabilities.