[quote=davelj][quote=livinincali]
Deferred compensation is a stupid arrangement. If you can’t pay enough right now to attract qualified people to the position then we can live without the service.[/quote]
Agreed. This is the root of much financial evil.
The average human is undisciplined and procrastinates. So s/he will not sufficiently save for retirement. It’s basic human nature.
So, under a fixed pension scheme, we take monies from folks who can’t and don’t save sufficiently for themselves and… add ANOTHER layer of procrastination in the form of a… a pension board that oversees the pension. This board is typically largely comprised of politicians and union reps for whom “kicking the can down the road” is the expedient course of action.
So, we double-down, in effect, on the procrastination element in these fixed pension schemes… and here we are – WAY underfunded.
If you look at it through the lens of human nature, it all makes sense. The trick, of course, is to not set these schemes up to fail in the first place… by not guaranteeing retirement benefits in the first place.[/quote]
Great. Let’s start with those who can most afford to lose their DB pensions and retiree healthcare benefits: executives.
