Good grief Rachel Maddow thinks pensions are not connected to Wall Street and stocks?

[dkf]

I used to think she was smart and had a clue but now I am not so sure.

[Enthusiast]

1. Unrecommended

She didn't say that.

[dkf]

2. What did she say then?

Both pensions and 401ks have advisors who charge fees. The Underlying investments are the same things...stocks, bonds, etfs, mutual funds.

With pensions trustees direct the investments. With 401ks the individual does.

But if the market does that badly and defined benefit pensions are underfunded they are vulnerable to being converted, terminated, etc.

From DOL:

http://www.dol.gov/ebsa/publications/wyskapr.html#chapter8

Chapter 8: Your Benefit During A Plan Termination Or Company Merger
As noted at the beginning of this booklet, employers are not required to offer a retirement plan and plans can be modified and/or terminated.

What happens when a plan is terminated?

Federal law provides some measures to protect employees who participated in plans that are terminated, both defined benefit and defined contribution. When a plan is terminated, the current employees must become 100 percent vested in their accrued benefits. This means you have a right to all the benefits that you have earned at the time of the plan termination, even benefits in which you were not vested and would have lost if you had left the employer. If there is a partial termination of a plan, (for example, if your employer closes a particular plant or division that results in the end of employment of a substantial percentage of plan participants) the affected employees must be immediately 100 percent vested to the extent the plan is funded.

What if your terminated defined benefit plan does not have enough money to pay the benefits?

The Federal government, through the Pension Benefit Guaranty Corporation (PBGC), insures most private defined benefit plans. For terminated defined benefit plans with insufficient money to pay all of the benefits, the PBGC will guarantee the payment of your vested pension benefits up to the limits set by law. For further information on plan termination guarantees, contact the Pension Benefit Guaranty Corporation toll free at 1.800.400.7242, or visit the Web site.
What happens if a defined contribution plan is terminated?

[Name removed]

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[dkf]

11. Oh I like it here. Sorry to disappoint.

[inna]

4. well, clearly they are (and i highly doubt Rachel is oblivious), but they should *not* be; too bad

we live in a fucking plutocracy, lol.

[SheilaT]

5. The traditional pensions were funded by companies,

sometimes with a buy-in from the employees, and even though the money may have been at least partially invested in the stock market, they guaranteed a set amount of pension money per month. Almost no one under the age of 40 has any experience with such a thing, and even those of us over 60 have only a passing acquaintance with them.

When I first started work at age 20 with a fairly typical company, you couldn't participate in the pension plan until you were at least 25. And at that point you'd start contributing some relatively small percentage of your paycheck to the plan, with the company kicking in an equal or greater amount. For reasons I have long since forgotten, when I was about 22 or 23, the pension plan changed, and everyone was included from day one, and the company alone paid into the plan. I wound up working for that company for a little over ten years, and I've been postponing collecting my pension to let it build up to a little more money. The last time I checked I'm entitled to about $150/month. Somewhat like social security, the amount builds if I don't collect too early.

[dkf]

10. But your company took those funds and invested it in the market.

[SheilaT]

12. Back then the funds were almost entirely

invested in Treasury bills. Because the payout was guaranteed, they didn't take any real risks with the money. Keep in mind I'm talking about the era prior to 1974, which is the year ERISA* was passed. There were major companies that decided to get out of the pension business because of ERISA. I knew people who were delighted with the check they got when their company returned their contribution to the pension plan when the company ended their pension plan. Even then, as young as I was, I knew that those delighted employees were delighted for all the wrong reasons. I've often wondered if those some people ever did a 401k, or even any decent savings of their own later on. My company simply decided to include all employees, no minimum age or length of service required, and employees no longer had to put in money from their own paycheck.

It was later on that they started invested in the stock market, and switched over to 401k plans.

The thing with those old pension plans is that they often had a very long vesting period. I believe ERISA originally set a ten year vesting, but I know it was reduced to a five year vesting by 1980.

*ERISA, the Employee Retirement Income Security Act. Here's a link to the website: http://www.dol.gov/compliance/laws/comp-erisa.htm

[Syrinx]

6. I was barely paying attention, because her show isn't as good as it used to be

But wasn't she talking about how Wall Street has been sucking the life out IRA's and other retirement accounts?

[sk2020]

7. Let's consider all possibitys.

I seriously hope this was an oversight on her part or she misspoke or was quoted out of context (not unlikely because people will stop at nothing to smear Rachel). Anyhow I've always liked her show especially how she's been able to intellectually thrash racists and fascists like Rand Paul.

[Lil Missy]

8. FAIL. For making that up.

[Name removed]

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[Rex]

13. I'm doubt she said that, but don't doubt you think that is what she said.

People are always getting stuff wrong they hear on the TVEE, you seem to be no exception.

[Bandit]

14. You have a way of constantly looking for the negative in Progressive figures..

You have to stretch things completely out of recognition to say she "said" pensions were never exposed to Wall Street...:shrug: it is what you do though..