Re:Americans Are Putting Billions More Than Usual in Their 4...
by mac01021 on Thursday January 05, 2017 @03:40PM
(#13331183)
> It is the workers of today paying for the retirees of today, on the assumption that when you retire there will be workers to pay for you.
Isn't that how pensions have traditionally worked too?
Re:Americans Are Putting Billions More Than Usual in Their 4...
by ensignavenger on Thursday January 05, 2017 @05:01PM
(#13331837)
No- pensions take money from you while you work, put it into savings (investments) and then use that money to pay you when you retire. A properly ran pension fund is not dependent on current workers to pay current retirees, and if there were no current workers, there would still be money to pay retirees.
Re:Americans Are Putting Billions More Than Usual in Their 4...
by mywittyname on Thursday January 05, 2017 @06:25PM
(#13332455)
Unfortunately, a significant number of pensions have large amounts of unfunded liabilities, which means they may end up bankrupt or convert into pay-as-you-go.
Re:Americans Are Putting Billions More Than Usual in Their 4...
by nickff on Thursday January 05, 2017 @04:35PM
(#13331635)
Most pensions at least pretend to be equivalent to a retirement savings account. Defined contribution pensions are effectively a savings account, and defined benefit pensions pretend to be similar (but are usually not).
Defined benefit pensions are usually used for government roles and some large unions, where the unions can get large increases in total employee benefits without having the true cost show up on the organization's books. The union and employer generally agree to use unrealistic numbers for returns on investment (>=8%/yr).
Re:Americans Are Putting Billions More Than Usual in Their 4...
by patmcguire on Thursday January 05, 2017 @05:25PM
(#13332019)
Yes, although I think the initial lag for pensions to start paying out is longer. First SS retiree payed in for only three years. https://www.ssa.gov/history/imf.html
Except the facts don't match up with this.
It is not designed to be like a pension. It is the workers of today paying for the retirees of today, on the assumption that when you retire there will be workers to pay for you. There is no guarantee, and there is no fallback. The money is spent just as soon as it's taken from you.
It is an entitlement because I'm paying for my parents and my peers' parents. If it's around when I retire, I will be spending other people's hard-earned money, not my own. I mean the Wikipedia "definition" of entitle is "a government program guaranteeing access to some benefit by members of a specific group" which is exactly what SS is.