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OPS Pension Fund $771M Short After Odd Investments


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1 hour ago, BigRedBuster said:

 

Here's the biggest issue with pensions.  They are funded AFTER someone retires.  

 

No. Just no.

 

Pensions, if you're doing it right, are funded during an employee's employment, as payout is typically dictated by the length and level of employment, as is the level of investment on the part of the employer. The only reason someone is having to fund *AFTER* someone retires is if the pension is running short due to malfeasance (willful or otherwise) on the part of whomever is responsible for the pension, as is the case with all three of the examples you gave. 

 

Now, if corporations and government entities are having to pay in after someone retires due to malfeasance, then you're seeing the effects of a poorly-run pension fund--that shouldn't be an indictment of pensions, but the people running them (or in some instances, raiding them for other company or governmental expenses). And being responsible and catching up sucks, but pensions, nor the people receiving pensions shouldn't be faulted--only the people ruining them via mismanagement. 

 

 

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1 hour ago, VectorVictor said:

 

No. Just no.

 

Pensions, if you're doing it right, are funded during an employee's employment, as payout is typically dictated by the length and level of employment, as is the level of investment on the part of the employer. The only reason someone is having to fund *AFTER* someone retires is if the pension is running short due to malfeasance (willful or otherwise) on the part of whomever is responsible for the pension, as is the case with all three of the examples you gave. 

 

Now, if corporations and government entities are having to pay in after someone retires due to malfeasance, then you're seeing the effects of a poorly-run pension fund--that shouldn't be an indictment of pensions, but the people running them (or in some instances, raiding them for other company or governmental expenses). And being responsible and catching up sucks, but pensions, nor the people receiving pensions shouldn't be faulted--only the people ruining them via mismanagement. 

 

 

Well, then there are a hell of a lot of pensions that are mismanaged.  

 

Your entire post is exactly why I think Pensions are horrible.  The entity that you work for, has total control over the account and can really screw things up. So often when the entity starts having financial problems.....gee.....the pensions can't be funded.

 

In a 401K type of retirement account, YOU have total control and ownership of the account.  You don't have to rely on the entity to remain viable, honest and responsible with your money.

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Pensions give me the same feeling that Social Security does. Fund it my whole life, then find it's not there when I'm supposed to collect it (I'm 40 years away from the current full-benefit retirement age). Please just give me the money instead so that I may be responsible with my own retirement.

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17 hours ago, mrandyk said:

Pensions give me the same feeling that Social Security does. Fund it my whole life, then find it's not there when I'm supposed to collect it (I'm 40 years away from the current full-benefit retirement age). Please just give me the money instead so that I may be responsible with my own retirement.

Social Security (or anything federally funded) is a totally different animal because the feds can always pay. And the federal government has many options including paying back over generations, not being tied to any industry or sector, not being tied to the stock or bond markets, alternative revenue streams like tariffs, fines, transaction fees, etc.

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On 1/22/2019 at 2:43 PM, BigRedBuster said:

Well, then there are a hell of a lot of pensions that are mismanaged.  

 

Your entire post is exactly why I think Pensions are horrible.  The entity that you work for, has total control over the account and can really screw things up. So often when the entity starts having financial problems.....gee.....the pensions can't be funded.

 

In a 401K type of retirement account, YOU have total control and ownership of the account.  You don't have to rely on the entity to remain viable, honest and responsible with your money. 

 

You don't have total control in most 401k accounts.  The plan administrator does.  For example, if I work at company A and they choose Wells Fargo to administer the plan I have very different investment options then someone that works at company B who chose Vanguard.  I'm sure company A saw a financial reason to go with Wells Fargo (or whatever plan administrator), but for me the employee I would get screwed with very few investment options that don't have ridiculous fees and expense ratios when compared to my friend at company B who's 401k is administered by a not-for-profit that basically invented low fee index investing.

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3 hours ago, methodical said:

 

You don't have total control in most 401k accounts.  The plan administrator does.  For example, if I work at company A and they choose Wells Fargo to administer the plan I have very different investment options then someone that works at company B who chose Vanguard.  I'm sure company A saw a financial reason to go with Wells Fargo (or whatever plan administrator), but for me the employee I would get screwed with very few investment options that don't have ridiculous fees and expense ratios when compared to my friend at company B who's 401k is administered by a not-for-profit that basically invented low fee index investing.

 

True, but the money is yours and the company can not touch it. 

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13 hours ago, BigRedBuster said:

 

True, but the money is yours and the company can not touch it. 

 

Not really, no. Methodical already spelled out why it truly isn't--you don't have control over whomever the employer chooses to administer the plan or whatever plan options are available. There's only an illusion of fiscal freedom with a 401K--reality is different. Sure, the money is in your account, and the company can't touch it...but they can control where and how you invest that money. 

 

Conversely, pensions can invest in anything and everything, both good and bad. The problem is that these decisions aren't transparent to the recipients--make these decisions and the administration of these pension funds fully transparent and open, and you'd have better long-term results in short order.

 

 

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40 minutes ago, VectorVictor said:

 

Not really, no. Methodical already spelled out why it truly isn't--you don't have control over whomever the employer chooses to administer the plan or whatever plan options are available. There's only an illusion of fiscal freedom with a 401K--reality is different. Sure, the money is in your account, and the company can't touch it...but they can control where and how you invest that money. 

 

Conversely, pensions can invest in anything and everything, both good and bad. The problem is that these decisions aren't transparent to the recipients--make these decisions and the administration of these pension funds fully transparent and open, and you'd have better long-term results in short order.

 

 

I’m not sure why you keep toying with the myth that 401k money is not yours. 

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57 minutes ago, BigRedBuster said:

I’m not sure why you keep toying with the myth that 401k money is not yours. 

 

I'm not sure why you have to keep resorting to strawmen arguments and putting words in my mouth.

 

I specifically mentioned in the post you quoted the money is in your account for a 401k. Sure the money is yours and you could take the money out (at a penalty), but that defeats the purpose of having a retirement account of any sort in the first place.

 

People investing in 401k plans have limited options for investing that 401k money (as dictated by your employer and plan administrator). And as has happened before with 401k plans, what happens when all of the investment options your employer/plan administrator has limited you to suck? Your plan administrator and/or employer could decide you can only invest your money in certain plans with as-crazy or crazier investment portfolios than what OPS chose. 

 

Again, there's only an illusion of freedom with a 401k at best. 

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You both can be right.

 

The freedom is an illusion in that you don't actually get to decide what your money is in.  You get options selected by a plan administrator that are often picked because they see some sort of benefit from it (usually a kickback for offering whatever fund).  So until you leave and rollover to an IRA, your being in charge of it is mostly an illusion.  But you do chose which of the offered investments to stick your money in.

 

Yeah a company can't raid it, legally, although they definitely have access to it and can pull money out if they think they paid it in error so in practice they probably could raid it, just would face massive scandal and lawsuits if they did because it would be stealing.  They also can change their "match" offering at any time and when they do I've never seen one raise it.

 

Ultimately it would be great if we could just uncouple the accounts from employers in the first place and you could have your own 401k where-ever you want and just tell them which 401k you chose to send pretax deductions and match dollars.

 

I don't see that happening though, just like healthcare, employers seem to love to have these things tie you to them.

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33 minutes ago, methodical said:

You both can be right.

 

...employers seem to love to have these things tie you to them.

 

Except that there are tax breaks for companies that offer 401k retirement. When/if those tax breaks go away, then you'll see them become uncoupled from companies, but then matching incentives will be gone as well. 

 

And this is the Politics and Religion tab. No two people with opposing views can both be right--it's like Thunderdome in these parts. /s

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On 1/19/2019 at 4:53 PM, funhusker said:

Right or wrong, NE teachers don't have a choice (as far as I know).  I'm required to give and the district matches...Unfortunately there isn't a lot left to invest in other retirement options.

 

Edit:  This isn't a "woe is 'underpaid' teacher me!"  post.  Just the truth that we pay 10% every month.  I think many people would be hard-pressed to find more money to save after 10% for retirement, mortgage, all other expenses including college funds for kids.

 

I'm hoping my wifes 401k rocks it and the pension is still there.  Could be a pretty cushy retirement!

Ha!  

 

I teach with a dood that retired from Papio at like 52 (I think) now he makes 4k a month from Papio (after his 100,000 early buyout, paid in 3 installments) and now he teaches full time with me...sweet deal!

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