[quote=CA renter]
We need to go back to 100% in-house management with NO outside advisors. Anyone found guilty of fraud or corruption, either inside or outside of the institution, should personally lose EVERYTHING and face a very stiff prison sentence.[/quote]
Why don’t we just eliminate the middle man completely and just give employees a defined contribution that they are free to invest how they wish. We immediately eliminate all the problems associated with a defined benefit plan. We get rid of all of the following issues.
1) Tax payer risk
2) Pension spiking
3) Lack of employment mobility
4) Corrupt Fund Managers
5) Double dipping
6) Employee Incentives to game the system.
If an employee wants income security in old age put more towards retirement and buy an annuity when you retire. You know exactly how much income you’ll get and whether or not you can afford to retire on that income.
The primary benefit of a defined benefit plan is to eliminate the employees personal risk in being able to retire comfortable. Everybody here would probably take a risk free guaranteed rate of return of 7-8%. Why should public sector employees be a special class of citizens that gets a guaranteed 7-8% rate or return in a 2% growth economy.
