[quote=harvey]sdr is spot on: Extrapolating statistics from the Fortune 100 across all public companies is ridiculous.
And I don’t really care if somebody fumbled their words a little, intentionally or unintentionally. It doesn’t matter that the numbers don’t quite jibe, because we still get the point. And the point is valid, I agree – there are still a few DB plans around.
Which brings us back to my argument, the one relevant to the topic, the one somebody tried to derail with minutia:
– DB plans are going away quickly in the private sector. They are mostly gone today.
– The reason for this decline is the same reason for any major change in the corporate world: shareholders/investors demanded the change.
– Shareholders demanded the change because it was just too difficult to determine the risk associated with DB plan liabilities on the balance sheets.
– Those risks are inherent in DB plans, and always will be. Investors will always have an unfavorable view of the risks associated with DB plans, and this will influence the stock price.
Think of it this way: If a company were to announce that it is abandoning it’s 401K program and replacing it with a DB plan, would their stock price be more likely to go up or down as a result of the announcement?
– There is no incentive for companies to offer DB plans. They can attract employees simply by paying them a fair salary.
A few private DB plans will linger on for a while, but they are, and will become, more rare. Regardless of the outcome in the public pension debate, nothing is going to reverse the trend in private DB plans.
Even though DB plans have mostly gone away in the private sector, millions of people still enjoy rewarding careers with fair compensation. It’s how most of the population lives.
What is wrong with applying the same system to the public sector? Why must their system of compensation be so different?
Anybody got an argument?
[The nit-pick feature has been disabled on this comment.][/quote]
How can anyone have an argument when you’ve instituted the anti-quibbling rule?
