Quote:
Originally posted by Tyrone Slothrop
You have workers who are not getting the pension plans they bargained for, and government regulators who are letting corporations abandon their obligations, and you think that has nothing to do with the operation of a free market? Apparently in your free market, only large corporations get to enjoy the benefits of entering into deals.
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OK, this is you drinking the Koolaid to an extent. Currently, pensions are protected up to a limit -- so the only people having their pensions reduced when a company turns the underfunded pension over to the PBGC are your "fat cats" -- people whose incomes were pretty fucking high. I will be behind you 100% if you want to say that all non-broad based pensions have to be eliminated, and the funds put into the broad-based plans, before a company can boot the broad-based plan over to the PBGC, but it's not the case that anyone other than the cream of the employees are really adversely affected by United sending the pensions to the PBGC.
On the defined benefit side, the largest plans are on the whole quite well funded. I don't have data on smaller plans (from smaller employers), but the largest plans cover the majority of people who have a defined benefit pension anyway -- smaller employers with smaller plans tend to terminate the plans if they move from defined benefit to defined contribution.
I'm not sure the system right now has the right balance between letting employers fund more heavily in good years to protect them against the lean years, when the value of investments in the pension fund will fall, leading to underfunding, but the company is dealing with a bad economy and is not in the best position to put money there. On the other hand, when the funding rules were looser, companies would use their pension plans as a tax shelter -- funds they put in were deductible.
I have to say that while I question some of the things IBM did with their pension plan, the uninformed witch-hunt on cash balance plans in Congress led to them taking the rather extreme step of stopping future accruals under the defined benefit plan altogether, and putting everone in a (richer) defined contribution plan. This is effectively doing to their employees what Bush wants to do to SS -- making their retirements dependent on their own investment abilities and the whims of the market.
Nonetheless, Medicare and corporate retiree health coverage and, by extension, healthcare in general are by far the more pressing problems. I wish people would fucking stop focusing so exclusively on SS and pensions.
Yes, Ty, I know you mentioned healthcare. I meant in general.
