Retirement?

That flies in the face of everything I have ever seen about this -- and I pay a bit of attention to the topic. ... most of the articles in the popular press hit the same points, and one has always been that average savings among people who were automatically enrolled is lower because people settle for contribution level they have been enrolled at rather than the much higher levels of contribution people choose when the choice was theirs.

This was the big article on it from several years ago, which got a lot of attention: 401(k) Law Suppresses Saving for Retirement

Similary, this is a report from Hewitt (big benefits consultant) from two years ago: http://www.aon.com/attachments/huma...2014-Universe-Benchmarks-Highlights_Final.pdf

From their recommendations for increasing savings rates, they point out the problem:

I can find you dozens of things pointing out the same phenomenon.

 

Aside from the fact that pensions are an economic impossibility for most employers in 2017, as well as an impracticality because of the mobile nature of the workforce today. ... A pension means that people aren't saving for their retirements. Their retirements are being funded and managed by someone else.

You posted that. ... yet in the discussion about the pension plans that still exist and how most are on the precipice of a crisis, you were dismissive of my pointing out the major reason -- they have been robbed for close to two decades by the Federal Reserve stealing from savers such as those pension / insurance funds. ... in order to reward debt creation (the politicians they serve). It has left those funds either unable to realize the risk-free rates of return necessary for a pension to meet its obligations. ... or having to engage in risky behavior -- having to gamble on risk assets with those people's retirement funds (many with poor results) on the HOPE they can meet their obligations. Your response to my pointing that out was something akin to "who cares?"

Defined benefit plans are the greatest thing in the world for lots of people.

Yeah, they were. ... in 1985. Think about all the things that have changed since 1985 -- the endless morass of regulations, the escalating level of monetary manipulation. ... and then maybe think about the effects it has had on things like employers' ability to offer defined benefit plans.

You reap what you sow.

 

It is a contributing factor to the extent that the meddling has economically hurt entities (by devaluing their currency and inflating the cost of their inputs). ... to the point that they are struggling and have needed to cut costs. Nominally things look much better than the reality of what businesses are facing in real terms. And yes, a number of things have contributed to that, including excessive regulation that has destroyed the business operating environment. ... and the monetary manipulation that exists to inflate away endless debt creation, but has the insidious effect of stealing from productive places to create the monetary inflation.

But thanks for your sharp analysis. Companies didn't used to be interested in their profit margins. Gotcha. Who would have guessed that? Business woke up after decades of not caring about making as much money as possible. ... and decided to make some money at the expense of their workers.

How does that work? I mean, the economy is humming along creating X much in goods. In order to attract the workers you need (and keep them from choosing to offer their services to a rival company), the labor market is dictating that you need to offer a certain set of benefits -- including a defined benefit plan of some sort. This is the natural leverage those workers have earned themselves given what they are producing, and it is somewhat standard for employees.

In your world, which doesn't consider all of the regulation (mostly that people like you foisted on the economy) that has destroyed the business environment (and hurt people's well being by making it so that most businesses struggle to make the profit margins they used to be able to, while offering better employee benefits). ... businesses didn't used to care about making money! That is incisive! Nope, the thing that actually changed is that they now do want to make as much money as possible.

Thanks for that.

How exactly did that work? I mean, Joe Blow business owner says, "Sorry workers, I am getting rid of the defined benefits package," because I suddenly want to expand my profit margins (never mind that profit margins haven't expanded as defined benefits plans have gone poof--but let's not look at reality). And his workers all nodded their heads and said, "cool" rather than getting other jobs at places offering the benefits they used to have? There were no businesses that wanted to remain competitive and attract the best workers? I mean, there is NOTHING approximating a labor market determining what leverage those workers have based on the value they bring to the business?

Or was it some kind of mass collusion, in which all of the business owners of the world got into cahoots and decided they were suddenly interested in making money (because that had never been their motivation in business) and they needed to get rid of their pension packages -- except they couldn't do it unless everyone was on board?

Love this.

 

Companies moved away from defined benefit plans to defined contribution plans because the defined benefit plans became too expensive. There are reasons for that --namely all of the interference people like you foisted on their businesses making it harder and harder to maintain profitability, while various entities screwed up our economy.

But you talk out of both sides of your mouth. When I point out those interferences in any amount of detail on here, you mischaracterize what I said with 3 words that have nothing to do with what I posted, and call it a rant. You dismiss it with "who cares?"

And then. ... not missing a beat, you turn around and complain about the effects of what YOU advocate for -- the things I had pointed out!

So I point out your hypocrisy. .. and I get a brilliant post suggesting that the reason defined benefit plans have gone away is that businesses suddenly woke up and decided they wanted "to squeeze ever higher profit margins."

It defies any reality -- in which profit margins have been SQUEEZED, not expanded -- the real reason businesses are desperate to cut costs -- and need to just to even offer the few relatively high-paying jobs some workers have left, let alone offer the benefit package they used to.

But don't bother actually responding to what I actually posted, when I point out the stupidity of what you said. Just dismiss me and say the word "rant" over and over again.

 

Of course they COULD. Workers didn't have the leverage they once had to negotiate for better benefit packages. You make it sound as if you have two sides negotiating something and one side unilaterally dictates to the terms to the other. The reason workers don't have the leverage to negotiate for generous pension plans is because of what I am saying: the companies that once had to offer those plans to attract the labor they needed are not able to earn profitably the way they were previously able to while spending more (on things like expensive benefits packages). In that environment, a worker is worth less. When that is the aggregate environment -- companies across the board being forced to cut costs (not the nonsense about increasing their profit margins), guess what? Workers' lose their ability to negotiate for better benefits. And yes, we are all reaping what YOU (from your posts on here) sowed.