[quote=CDMA ENG][quote=ucodegen]What I find annoying is that these same teachers, etc want the pensions instead of having the money go to their own 401Ks.. that they control. (use low fee index funds)
The taxpayers end up paying for this though, because the pensions are a form of ‘defined’ benefit, and the taxpayers have to close the gap.[/quote]
As much as I hate to sound like a union pension advocate the simple truth is that most major companies can borrow against your 401K as well. I am not sure of all the details but someone always has access to your money.
CE[/quote]
No they can not. They have a fiduciary requirement. They have absolutely no access to that money. I got one HR person in trouble when they transferred my 401K w/o my permission when I was transferring from one company to another company which was held by a third parent company. My plan was to roll that money out on leaving the first company.. which I legally could.
[quote=CA renter]If you study the history of these public pension funds, you’ll see that they originally invested only in VERY safe Treasuries (typically the largest allocation) and highly-rated bonds. It was the lobbying done by Wall Street that enabled the funds to put more and more of the pension money into riskier and riskier assets. It was the PRIVATE sector (the financial industry) that wrecked the pensions, not teachers, firefighters, cops, etc.[/quote]
The best way to get it out of the hands of those who have a greater impetus to fudge the numbers and contributions than to be up honest.. is to get it immediately out of their hands on every pay period. They really don’t face any consequences to their ‘fudging’.. but the employee does.
[quote=jeff303][quote=ucodegen]What I find annoying is that these same teachers, etc want the pensions instead of having the money go to their own 401Ks.. that they control. (use low fee index funds)[/quote]
Not all employer plans offer access to such funds. Often times, one’s portfolio options aren’t very good.[/quote]
True. One fix is for the employees to become activist in this respect. Some don’t want to rock the boat.. me.. I’ll overturn it if I have to, in order to set it right. This occurred at one company I worked at. Enough employees got ‘activist’ enough to cause the company and the 401K management firm to update their offerings.
The other is to start requiring companies to do direct 401k transfers to investment companies of the employees choice. The ‘real’ cost of transferring the money is insignificant. All of the detail movements are just electronic bookkeeping, with the sum of changes involving actual transfer of money.
