Overhaul of Pension-Funding Rules Sought

[applegrove]

Overhaul of Pension-Funding Rules Sought

http://apnews.myway.com/article/20050607/D8AIOGOO0.html

Jun 7, 7:43 AM (ET)

By GLEN JOHNSON

"WASHINGTON (AP) - Fearing that airlines and other struggling industries could present the country with its next S&L crisis, Congress and the White House are pushing an overhaul of pension-funding rules that has been overshadowed by Social Security.

The heads of three major airlines were called to appear Tuesday before the Senate Finance Committee. Its leaders are alarmed that the Pension Benefit Guaranty Corp. - the federal agency that insures private pension plans - already has a $23.3 billion deficit because of defaults.

More than half of the 100 largest plans had less than their promised benefits on deposit, which the committee's chairman blames on lax rules that are supposed to guarantee full endowment.

About 34 million people - roughly 20 percent of the nation's workforce - expect to receive payments from their employers through defined benefit plans. "

-- Snip --

[cthrumatrix]

1. underfunded pensions are "funded by profits" ...sooo if other pensions

are under thier expected 6-7% rate of return then the $$$$'s come from profits...which would hurt their report to the stock market crowd.....

get the picture.... the market has to be kept up and pensions are a part of that effort.

[applegrove]

2. Exactly. You explained it very well. I read about it the other day -

about how books are being 'cooked' using assumed rates of pension growth nowhere near reality. And that goes in the books as profit this year.

I am glad someone is finally paying attention to that. All this 'fluffing' on the stock market makes me sick!

Bush has so far fluffed the stock market by borrowing in one of many ways. This is credit. Now it is not just the government that is in big debt but the corporations followed the bouncing ball.

What happened to taking your 'corrections' like a man?

So instead we have families going further into debt and buying bigger houses or fancy civil goods based on mortgages and assumed rates of real estate growth too.

While wages are going down and except for oil - we will see deflation in the next 40 years (low levels). So how about those families that didn't go through the correction and have been spending like drunken sailors? Will they be locked into a mortgage of longer term and based on over-inflated house prices. A correction (like the one Bush has so far skipped since 2002) serves to remind people that markets are not perpetual and you have to save for a rainy day.


Meanwhile the very rich have had a good extra 5 years to divest of 'old fashioned stock' or anyone who is overestimating pension growth (because they can afford the better stock-brokers). While regular investors still buy American stocks.

[sadiesworld]

3. Remember when the repubs sicced the capitol police

on the dems a couple of years ago (who could forget the sight of Bill Tomas blubbering when he got caught lying)?

Weren't the repubs trying to push through legislation which would permit corps to underfund their pensions?

:shrug: