Wilber Posted December 23, 2009 Report Posted December 23, 2009 (edited) Lie, they only have to maintain like a 10% level on the pensions... and that practice is government sanctioned fraud. 10% of someones promised retirement funds is a fraud. Companies don't have to make any contributions as long as employee contributions keep a plan fully funded. The rules regarding when and how those calculations are made and when shortfalls have to be made up have been proved inadequate by recent events. Groups which have agreements whereby the company is solely responsible for funding their plan have accepted more risk that the company will always be around and in a position to fund it. Companies have used the rules to limit their contributions but that is not fraud. What has worked well in the past has been shown to be inadequate in todays environment. It is also very wrong that pension plans go to the back of the creditors line in the event of bankruptcy. Explain this 10% number, all I know is that companies are not allowed too make contributions which would result in a plan becoming more than 110% funded but that is more because government doesn't want to give up the tax revenue from non taxable pension contributions. We will have to find a way to look after people's financial needs in their old age one way or another, unless you want to be tripping over seniors sleeping in the street or start putting them down if they can't meet a means test. Some sort of forced savings for retirement for all workers and employers plus a voluntary plan for those who aren't in the workforce is preferable to paying for it out of general revenue after the fact, IMHO. Edited December 23, 2009 by Wilber Quote "Never trust a man who has not a single redeeming vice". WSC
Alta4ever Posted December 23, 2009 Report Posted December 23, 2009 Eventually you want to eat up the principle (you can't take it with you and the government will get a big chunk of what is left) but seeing as you don't know when you are going to croak and can't foresee inflation rates, how the market will perform over the rest of your life or what your own personal needs may be as you age, timing when you are going to run out is no simple matter. If your interest, capital gains and dividend income is all of a sudden cut in half, your principle is going to disappear at a much greater rate meaning your fund's ability to generate income when times improve will be much less. Registered pension plans are subject to strict rules when it comes to the amount of risk they can take. All those plans that went from 100% funded to 70% funded in the space of nine months are not run by amateurs. Inflation rates have been pretty static at about 3% over the long term, short term they look like well the andex chart, big peaks and valleys. Quote "What about the legitimacy of the democratic process, yeah, what about it?" Jack Layton and his coup against the people of Canada “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” President Ronald Reagan
Alta4ever Posted December 23, 2009 Report Posted December 23, 2009 Lie, they only have to maintain like a 10% level on the pensions... and that practice is government sanctioned fraud. 10% of someones promised retirement funds is a fraud. Right, your wrong again, the pentioin has to be funded to 100% of what the company has promised to fund, they can only take a vacation from this if they apply for one from the regulatory body. The big problem in pentions is the defined benefit, these should have been done away with years ago. Quote "What about the legitimacy of the democratic process, yeah, what about it?" Jack Layton and his coup against the people of Canada “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” President Ronald Reagan
Wilber Posted December 23, 2009 Report Posted December 23, 2009 Inflation rates have been pretty static at about 3% over the long term, short term they look like well the andex chart, big peaks and valleys. Again, the difference between investing and investment income. Long term averages mean little if you are hit with a downturn right at the time you need those funds and the income they generate to live on. There comes a point when time is not your friend. If you want to stay completely away from market risk you can mediate the effect by having interest bearing investments maturing at different intervals but if you are having to reinvest something at 2% which was formerly paying 5%, that is a 60% decrease in what that investment is earning, no matter how you cut it. This only applies to GIC's and term deposits because bond values fluctuate according to the going interest rates and time left to maturity. Quote "Never trust a man who has not a single redeeming vice". WSC
William Ashley Posted December 23, 2009 Report Posted December 23, 2009 Right, your wrong again, the pentioin has to be funded to 100% of what the company has promised to fund, they can only take a vacation from this if they apply for one from the regulatory body. The big problem in pentions is the defined benefit, these should have been done away with years ago. This issue came into the public eye when the automakers started declaring bankrupcy. See some of the following links: http://www.thestar.com/business/article/721322--actuaries-propose-a-strategy-to-bolster-pensions http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20091207_154537_9836 http://www.thestar.com/News/Canada/article/602620 http://retirementaction.com/UnderfundedPensionPlans.aspx Quote I was here.
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