[quote=CA renter]
And no, I’m not at all a fan of DC pension plans. IMHO, DB pension plans can absolutely work, but you have to keep everything in-house (no privatization!!!!), and use extremely conservative assumptions for both expenditures and returns. If that means that employees have to pay more/get less, so be it; but I want that to be decided only after the system is allowed to cleanse and heal itself…which will require a period of rather painful deflation, a shrinking wealth/income gap, and a more efficient/productive (and egalitarian, IMO) reallocation of resources.[/quote]
None of which will really occur. I’m not a fan of DB’s for one simple reason, a promise to pay someone starting in 30 years for the 30+ years after that is inherently fraught with risk and abuse. In a DC, your commitment is fulfilled in that year’s pay. It has a side benefit of eliminating the need for employees to ‘stick it out’ to get their max benefit payout.
It would take more money to do a DC. If I need to pay 1000 people $100K a year, I need a much smaller pile than if I need to plan to pay myself $100K a year.
