Monday, January 16, 2006

Pensions Are History

Pensions didn't exist in a vacuum. Smart accountants and actuaries hired by large corporations determined how they could create a savings account that would provide income for their workers during their retirement years.

In return, workers agreed to smaller wages in the present.

It was a mutually beneficial solution; but then something happened management never expected.

These huge piles of pension money exploded during boom times. As always, greed set in. Companies immediately found ways to steal that money. When boom times receded, management began underfunding pensions, and judges with Alito philosophies let them get away with it.

Of course, wages were never raised to compensate for such shortchanging.

Now dishonest companies and incompetent managers (see GM, UAL, ALCOA, Motorola, etc.) have themselves in a pickle. Huge sums of money they have promised workers; and no stockpile of the stolen or unfunded capital.

This article makes the point that these companies will cry "we can't pay" now that the rules have been changed to make them honest, and they will freeze the pensions.

News flash... they were going to freeze them anyway. Leaving the loopholes so companies can continue stealing and underfunding won't solve the problem. Let's just stop the lie that there is a middle-class anymore and kill the last of the remaining penison plans.

I feel the same way about the minimum wage. It's time to stop the federal mandate that allows companies to pay workers poverty wages and dignify it with the label "minimum wage." It needs to be raised.

For those companies that will bawl about going out of business due to the huge burden of paying someone poverty wages instead of below-poverty wages: let them die.

Most of them are lying, and for those that aren't; we don't need those jobs anyway.

Accounting Changes May Squeeze Pensions: Yahoo! News

"Pensions and other retirement benefits have stirred controversy in accounting circles for years. Critics say while companies made expensive promises to workers, accounting rules let them engage in a shell game and mislead investors about the value of stocks, bonds and other assets held by pension plans. While they can fluctuate widely, the rules let companies smooth the numbers, creating distortions in their balance sheets that can make a whopping liability look like a sizable asset."

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