MONEY: Benefit are a big loser for employees

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COLUMN: Can we put an end to corporate socialism already?
Thursday, July 1, 2010 | 12:49 p.m. CDT; updated 3:04 p.m. CDT, Thursday, July 1, 2010
BY George Kennedy

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New state employees, most of whom will earn less than $25,000 a year, will have to start contributing 4 percent of their salaries to their pension program, which has long been one of the benefits that compensate for low-paid careers.

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Why do you have a Gooferment pension plan? Isn’t that socialism as well? Aren’t you in effect saying that people aren’t capable of managing their own money?

Maybe that 4% is more important to pay for something the individual values more than a “pension” sometime in the future.

Let’s not overlook that there are some “interesting” unintended consequences.

(1) What happens if the new employee doesn’t do the five years to get vested? Guess that poor slob made a bad bet.

(2) What happens if the Gooferment decides to pull the rug out from under them and changes the “law” so there’s no pension?

(3) What happens if the pension plan is underfunded? (Here in NJ the gooferment hasn’t funded the state pension plan in a decade and no one really knows what that means.)

(4) What happens if like CALPERS that investments don’t keep up with obligations?

(5) What happens if the poor slob dies the day before he retires? Day after? Like Social Security, it’s probably a bad bet.

(6) What happens if we have inflation? And our poor slob is retired on fixed income. Bad bet? (If he or she had a their OWN diversified investment portfolio, then they’d be capable of making some adjustment. In theory, portfolio income would go up to in some way compensate. The defined benefit of a pension plan means they are screwed.)

(7) What if when the poor slob retires, he wants his money to make a big purchase? A vacation home for cash. Buy into an assisted living. Or anything. What’s he do, go to JGWENTWORTH to sell his pension at a discount?

SO I think what you have is socialism at the expense of the low wage person. (Poor slob is intended to engender sympathy for some one who just has to shut up and take it.)

Along time ago, I talk to an AT&T pension actuary who explained how benefits were a huge win for the employer and a big loser for the employee. It’s never changed.

And don’t get me started on the Social Security Ponzi-like Fraud.

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Upon reflection, the Employer could, as a condition of employment, negotiate that a suitable third party pension plan must be taken by all employees. So that no one retires on welfare. Wonder what the CEO and CFO would say? TO that I say, what’s good for the goose is good for the gander.

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