[quote=CA renter][quote=harvey][quote=temeculaguy]The trend is towards the elimination of the traditional pension, hopefully that makes you sleep better.[/quote]
That is the trend, and I’m optimistic that common sense will ultimately prevail.
Defined benefit pensions are a financial experiment that failed, but the effects still linger.
The OP was asking how much damage is left to be done.
The question is still relevant.[/quote]
Fifty years from now, do you honestly think they’ll be talking about the success of defined contribution pension plans? Which one do you think will be viewed more favorably, DB or DC pensions, once the DC debacle comes home to roost?
You’re dreaming if you think that DC pensions are superior in any way to DB pensions. I agree that some of the formulas are too generous (and have felt that way since the pension increase passed in CA), but DB pensions have been around a lot longer than DC pensions (since the Roman Empire, if not earlier), and they’ve done exceptionally well, all things considered.
[/quote]
Déjà vu
[quote=phaster]
September 8, 2014 – 8:59am.
[quote=CA renter]Many have defined benefits, and DB plans were the norm a few decades ago…you know, when the middle class and the economy were at their strongest.[/quote]
That era back in the 1950’s and 1960’s was IMHO an anomaly in world history, because the USA was the only super power in terms of military and manufacturing.
Consider that Japan and Germany back then had no manufacturing base, so DB were a way to instill worker loyalty (or said another way, DB came about because of a good economy, DB for the “middle class” didn’t create a good economy).
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[quote=phaster]
October 2, 2014 – 8:18pm.
[quote=CA renter]
You’re also clearly ignorant about the differences between DB and DC pensions. DC plans have higher administrative costs and lower returns; DC plans have access to fewer investment options; DC plans don’t pool longevity risk; DC plans have lower contribution limits than DB plans (for employer and employee); and DB plans can remain in higher-yielding and more diversified investments and can better manage the ups and downs of the market over time because they are continuously funded by the contributions of current employees and their employers, and benefits are staggered well into the future (pooled investment risks over time and number of people).[/quote]
News reports about CalPERS and the SD pension board, leads me to believe idiots who over estimate their own management abilities AND have no basic understanding of math or the investing paradox, are at the helm.
Given your logic since CalPERS and SD have “professional” managers, elected board(s) to provide oversight and access to diversified investments, then why haven’t they beat the market benchmarks (i.e. the index of the DJ30 or S&P500)?
Simply stated a disciplined small/individual investor can beat market averages over long periods of time, because their trades fly under the radar and are “un-noticed” by the market.
However when the portfolio is in the BILLIONS (as is the case w/ SD), or the HUNDREDS OF BILLIONS (as is the case w/ CalPERS), any trade they make I’d argue is the market (so a different investment style is needed).
[quote=phaster]
[quote=livinincali] The one benefit of defined benefit contribution plans, retention, isn’t worth the risks, the frauds, the vote buying, and everything else it enables. That’s the bottom line. The rewards (reduced training costs retention, etc.) don’t outweigh the risks and therefore they should be scrapped..[/quote]
Agree! And after doing some research, seems the best way forward is to follow the example set by the Thrift Saving Plan (a federal government 401K style program, that can’t be corrupted/mismanaged like what happend at CalPERS or as what is happening with the SD pension program)
The Thrift Savings Plan, used by millions of federal workers, is like a 401(k), except it’s a lot cheaper. Last year it charged an average expense ratio of a mere 0.03%. That means just $3 in fees for $10,000 in savings, or $30 for a $100,000 portfolio.
John Turner, an economist and director of the Pension Policy Center and a former federal worker himself, said “Unless they’re advanced investors, I think they should leave their funds in the TSP because it’s simple and it’s easy enough that most investors can do it and do it well”
Don’t be a a useful idiot. If you’re not being paid, you should definitely demand payment from [Strike]the Privatization Movement[/Strike][CalPERS] for your services. They expect to reap great rewards from the work of people like yourself; make sure to get your piece of the pie.
I have yet to see Jerry Brown “calling bullshit” on CalPERS. Please include a quote (a real one, not one of your “edited” ones), and cite your source.
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[quote=REUTERS]
…Governor Jerry Brown, a proponent of a sharper reduction in the expected rate of return, was quick to criticize the move, arguing the pension fund should move faster to cut risk from its portfolio.
“I am deeply disappointed that the CalPERS Board reversed course and adopted an irresponsible plan that will only keep the system dependent on unrealistic investment returns,” Brown said in a statement on Wednesday. “This approach will expose the fund to an unacceptable level of risk in the coming years.”
