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Started By
Message
Why did pensions go away?
Posted on 12/15/21 at 3:58 pm
Posted on 12/15/21 at 3:58 pm
Was it just too expensive for companies or something else?
19
Posted on 12/15/21 at 4:01 pm to bdavids09
Pretty sure it was becoming really hard for most companies to fund their pension obligation. Lots of accounting/statistics behind all of that.
Posted on 12/15/21 at 4:07 pm to bdavids09
People don't stay at jobs for 30 years any more too so it's a noncompetitive benefit to offer compared to higher pay with no pension.
Posted on 12/15/21 at 4:11 pm to bdavids09
quote:
Why did pensions go away?
Govt workers still get pensions. Why I have no idea, but they do. Also other retirement investment vehicles. Thank a taxpayer.
Posted on 12/15/21 at 4:15 pm to bdavids09
When bond yields went to the floor, actuaries were caught with their pants around their ankles.
Rate of return expectations were too high and the promised cash flows were drowning pension heavy businesses.
Rate of return expectations were too high and the promised cash flows were drowning pension heavy businesses.
This post was edited on 12/15/21 at 5:05 pm
Posted on 12/15/21 at 4:15 pm to kywildcatfanone
quote:
Govt workers still get pensions
Just reminded me of how big of a ponzi scheme social security is. If they had to keep their obligation funded like the private sector there is no way it would survive.
Posted on 12/15/21 at 4:16 pm to bdavids09
yes
Posted on 12/15/21 at 4:44 pm to kywildcatfanone
quote:
Govt workers still get pensions.
Not nearly what it used to be. It was basically sliced in half in the 80's. Pre-Reagan, you could retire after 20 years and keep your benefits and about 40% of your income. Workers could max out their pension at 80% if they worked something like 42 years. Federal workers hired after that changes in the mid 80's have to be 57-ish to retire and have a certain amount of years under their belt. So the days of some 20 year old being hired and retiring at 40 are long gone. I'm certainly not arguing that it should be that way anymore. I'm pointing out that the retirement plan and benefits aren't as good as they were a few decades ago.
Posted on 12/15/21 at 4:50 pm to bdavids09
I am getting a small modified pension when I retire.
As others have said it got to be too expensive for companies to fund them properly. My grandpa retired at 65 and they paid him his a monthly pension until he died at 92 years old
As others have said it got to be too expensive for companies to fund them properly. My grandpa retired at 65 and they paid him his a monthly pension until he died at 92 years old
Posted on 12/15/21 at 4:53 pm to RTN
Pensions/Healthcare were initially a way to ensure a stable and loyal workforce. Work hard and be rewarded when you are unable to work.
Enter advisors that are paid to advise corporate executives that there is way to increase earnings easily.
Pensions became IRA's and the Wall Street expansion began.
It's crazy out there. Hedges, puts, calls, insider information, speculation, government intervention (i.e. taxation) banker manipulation...
and the regular joe is prey. He doesn't stand a chance.
Why did pensions go away? Because there was money to be made.
Enter advisors that are paid to advise corporate executives that there is way to increase earnings easily.
Pensions became IRA's and the Wall Street expansion began.
It's crazy out there. Hedges, puts, calls, insider information, speculation, government intervention (i.e. taxation) banker manipulation...
and the regular joe is prey. He doesn't stand a chance.
Why did pensions go away? Because there was money to be made.
Posted on 12/15/21 at 5:04 pm to bdavids09
Retirees outgrowing the replacement work force. Increased life expectancy and retirement age that has stayed the same instead of increasing as well.
Posted on 12/15/21 at 5:08 pm to bdavids09
Business and federal government created tax deferred plan in the 70s. Began the shift of the cost and risk of retirement to the employee. Also income tax rates were very high in that decade, so deferred income to higher earnings really meant something. As usual, expectation of the pols thinking wages would rise for the middle class to offset inflationary costs too. Who was in charge in the 70s? BTW, some smaller companies are using pensions again to attract and hold employees.
Eta: research the stock market values of the 70s for a correlating growth. Capitalism begins bigly.
Eta: research the stock market values of the 70s for a correlating growth. Capitalism begins bigly.
This post was edited on 12/15/21 at 5:16 pm
Posted on 12/15/21 at 5:15 pm to BestBanker
I’ll be getting a pension when it’s all said and done but it’s so damn confusing that I’m planning my retirement just through 401k and Roth . Pension will be a really really nice added bonus when the time comes.
Posted on 12/15/21 at 5:17 pm to CE Tiger
Your pension, SS, and personal savings might get you to 100% pre-retirement income.
Posted on 12/15/21 at 7:38 pm to LSUcam7
quote:
bond yields went to the floor
Posted on 12/15/21 at 8:46 pm to bdavids09
Companies don’t want that liability on their books.
401K matching is defined contribution and predictable.
401K matching is defined contribution and predictable.
Posted on 12/15/21 at 8:49 pm to bdavids09
Adding women to the full time workforce in the second half of the 20th century almost doubled the number of workers and halved the value of many types of labor. That in turn depressed salaries and reduced the benefits employers had to offer to attract and retain employees.
This is not a statement about whether women should be in the workplace. This is a comment about the effects of adding more labor supply to the workforce
This is not a statement about whether women should be in the workplace. This is a comment about the effects of adding more labor supply to the workforce
Posted on 12/15/21 at 9:06 pm to bdavids09
Managing own pension plan is way more administrative work and $ for a company, having a 3rd party do your 401k and company provide a small match (typically) is just much cheaper and easier for companies. That's why it got popular.
1 nice advantage to 401k is if company went bankrupt your pension could be potentially be in trouble, but 401k is yours. Also, to an extent, you choose the investments vs. a pension plan.
1 nice advantage to 401k is if company went bankrupt your pension could be potentially be in trouble, but 401k is yours. Also, to an extent, you choose the investments vs. a pension plan.
This post was edited on 12/15/21 at 9:08 pm
Posted on 12/15/21 at 10:05 pm to bdavids09
quote:
Was it just too expensive for companies
Imagine promising to pay someone, for life, 80% of their highest 3 years of income 40 years from now. Think of that math and risk, and tell me if just putting 6% of their income into a 401k sounds like a better deal.
Posted on 12/16/21 at 6:15 am to slackster
quote:
Imagine promising to pay someone, for life, 80% of their highest 3 years of income 40 years from now.
And this is passed to the younger generations to pick up the slack for stupid decisions made before they were even born.
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