[quote=pri_dk][quote=UCGal]Rather than trying to ripp the pensions from people who still have them, why not argue that this trend should be reversed in the private sector.
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One of the frustrating aspects of these pension debates is that many folks simply ignore the simple fact that pensions cost money.
In many cases, these pensions cost millions of dollars per employee.
There seems to be a perception that pension compensation is somehow different from a paycheck or a bonus or some other payout – that the money used to pay pensions does not need to come from an ordinary bank account funded by ordinary money.
Saying that the private sector should also receive pensions just like the public sector is the financial equivalent of saying everyone with a job should automatically get a million dollar bonus when they are 55. A wonderful idea that prompts the obvious question: “But, where does this money come from?”
The money simply doesn’t exist in the private sector and the only way it comes into existence in the public sector is by taking it from the taxpayer.
For those arguing in favor of generous pensions for all, I have some sobering news for you: There is no magic pension fairy that can create wealth out of thin air.[/quote]
The money used to exist in the private sector it was common and normal for the private sector to offer pensions until a few decades ago. But then again, executive compensation was less than 20 times the average workers salaries up until a few decades ago. Pensions are still the norm for corporate executives. Are system has gotten screwed and distorted.
Just to be clear, I think Gov. Brown’s proposals are good. Get rid of spiking, use base salary only in calculations, etc. Reforming public pensions is a good idea.
The trend to defined contribution plans, from defined benefit plans is about transferring risk. This, in combination with discussions about privatizing social security are all about funnelling peoples retirement income into the risky stock market and generating broker/transaction fees. It’s setting us up for a terrible scenario where seniors are literally starving because of a volitile market concurrant with their retirement.
Just because the trend is away from defined benefit plans doesn’t mean that is a good thing.
