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Earlier this month we outlined why it is a bad time to be a pensioner. Among the issues we identified were the 18% increase in EU corporate pension deficits occasioned by the use of a lower discount rate in the calculation of the present value of liabilities (thank you Mario Draghi), US public sector pension plans’ shift away from fixed income and towards more risky investments due to an express unwillingness to adopt more realistic investment rate assumptions (because that would mean lowering the liability discount rate), and a rumor (which just today was confirmed as fact) that Greece will indeed look to their plunder pensions in order to stay afloat.
In the most recent example of why pensioners in the US should perhaps be a bit concerned about the security of their benefits, a new report suggests that the government agency in charge of backstopping private-sector pension plans (the Pension Benefit Guaranty Corporation) isn’t entirely optimistic about its own ability to provide an effective safety net for multiemployer plans.
Via Pensions and Investments:
More than half of multiemployer plan participants will have their benefits reduced if their plans become insolvent and rely on government guarantees in the near future, said a study released Wednesday by the Pension Benefit Guaranty Corp.
That compares to 21% of participants now in plans that have already run out of money and rely on PBGC guarantees.
As the following chart shows, the agency is doing a fairly decent job when it comes to participants in plans that are currently insolvent and receiving assistance, but when it comes to backing up plans that are “likely to need assistance in the future,” the outlook is not good, with more than half of participants suffering a reduction in benefits...
originally posted by: marg6043
a reply to: arjunanda
Perhaps this is the reason why Obama was pushing for to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k's.
originally posted by: lordcomac
Did anyone actually think they would see that money again?
My parents probably won't see theirs- and I know damn well I won't see mine. Gub'ment puts a gun to my head- I put 4k into "SSC" last year against my own will- knowing full well I'll never get it back.
That 4k could have done a lot more good in my pocket, going towards an actual retirement plan- a piece of land to call home, or a tractor to work it.
We're all working until we die- one way or the other.