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  #21  
Old 11-21-2013, 12:05 PM
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Originally Posted by Arthur Kade View Post
Let me remove their uncertainty. They're not safe. Their only choice is between a haircut starting soon or getting nothing a few years down the road.
I would love to see a similar calculation for Illinois plans.
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  #22  
Old 11-21-2013, 06:40 PM
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Let me remove their uncertainty. They're not safe. Their only choice is between a haircut starting soon or getting nothing a few years down the road.
Are MEPs not PBGC-protected? Because I'd guess most of these people have small enough pensions that they'd fall below the PBGC threshold and get pretty good protection.
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Old 11-21-2013, 06:47 PM
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They get a much lower protected payment than single employer plans. Per the article, $12,870 vs $59,320.
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Old 11-21-2013, 07:17 PM
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Are MEPs not PBGC-protected? Because I'd guess most of these people have small enough pensions that they'd fall below the PBGC threshold and get pretty good protection.
I'd suspect the PBGC's days are numbered, but I also suspected bailouts and money printing wouldn't happen 5 years ago.
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Old 11-21-2013, 07:21 PM
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I'd suspect the PBGC's days are numbered, but I also suspected bailouts and money printing wouldn't happen 5 years ago.
I've always considered PBGC to be like Fannie/Freddie - we aren't part of the government, we're privately funded, we don't have access to taxpayer funds*.

Interesting that they have a lower benefit for MEPs - wonder if there was a reason that was set up. Regardless, somebody with $30k annual income from pension and SS isn't exactly poverty level, especially if at a point in life where house is paid for, etc.

*until everything collapses and we need more money
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Old 11-21-2013, 08:38 PM
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Interesting that they have a lower benefit for MEPs - wonder if there was a reason that was set up.
I think part of the cited rationale is that MEPs pay a lower PBGC premium, supposedly because being from more than one employer they should be diversified. Starting to look like they aren't so diversified.
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Old 11-21-2013, 08:43 PM
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Well, if you're arguing for lower premium because you're lower risk, then that doesn't lead to lower benefits - you should pay lower premium for the same benefit if you're less risky.
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Old 11-21-2013, 09:16 PM
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I think part of the cited rationale is that MEPs pay a lower PBGC premium, supposedly because being from more than one employer they should be diversified. Starting to look like they aren't so diversified.
you mean that entire unionized fields may be highly correlated?

the hell you say!
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Old 11-22-2013, 03:21 PM
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Well, if you're arguing for lower premium because you're lower risk, then that doesn't lead to lower benefits - you should pay lower premium for the same benefit if you're less risky.
You are absolutely correct. I was repeating reasoning from the article. If I had to guess (it would be a guess) that it was a very political processby which the PBGC deftly lowered their risk and the employers lowered their cost and the employees (those that worked the latest) get screwed.
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you mean that entire unionized fields may be highly correlated?

the hell you say!
I know, all this hidden risk. We need some actuaries to help the policymakers figure this ... aw crap.
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Old 03-16-2014, 11:42 AM
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http://www.startribune.com/business/250222581.html

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The pension checks of an estimated 750,000 American retirees could be reduced if a pension reform proposal gaining traction on Capitol Hill becomes law.

The reform package, drawn up by an employer-worker coalition created by the National Coordinating Committee for Multiemployer Plans, would allow troubled multiemployer pension plans to cut benefits currently being paid to people already retired.

Slashing existing payouts isn’t legal under current pension law, except for narrow exceptions with severely stressed plans, according to the Pension Benefit Guaranty Corp., the federal agency that backstops the country’s pension plans. The traditional approach to the underfunding problem has been increasing the money employers put into plans, and shrinking future benefits, it said.

About 150 to 200 of the country’s roughly 1,400 multiemployer pension plans are projected to become insolvent within the next 10 to 20 years, according to the Pension Benefit Guaranty Corp. (PBGC). Those deeply underfunded plans cover about 1.5 million of the 10 million people in multiemployer pension plans.

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