Nyt Article On Cause Of Pension Problems

[novaqt]

This from today's NYT. <_< Very interesting how forensic investigation is being avoided. Be sure you check the graphic, it should frost your jets.


http://www.nytimes.com/2005/07/31/business.../31pension.html

 

[Bob Owens]

This from today's NYT.  <_<  Very interesting how forensic investigation is being avoided.  Be sure you check the graphic, it should frost your jets.
http://www.nytimes.com/2005/07/31/business.../31pension.html

[post="284997"][/post]​

Now Wall Street and Bush want to do for the Social Security system what they have done with the UAL pension!!!

I'm sure that when they moved the funds from bonds into stocks they justified it by saying that "historically over the long term stocks yield higher than bonds" which is pretty much the same spin that Bush and company are trying to sell now.

Whats really amazing is that many of those who could be hurt the most are actually buying into this.

 

[eolesen]

Yep. The lure of easy money will do that to you... It's like casinos -- the people who lose the most there are the people who shouldn't have been putting their money on the line to begin with.... At least the current Bush plan would allow more conservative investors to place their money into less risky investments, and take the lump sum when they're of retirement age.

 

[TechBoy]

For the NYT, this is one of the worst researched articles that I have read in a while. All kinds of relevant information is left out of the article. For instance: How did UA's investments in asset classes differ from the typical pension fund? How did UA's funds perform compared to other plans? How much of the unfunded liability was caused by dramatically higher employee salaries granted around 2000? Was UA contributing sufficient amounts to the funds during the good years?

Anytime the government (not to mention the workers) takes this kind of loss, there should be a serious investigation. Perhaps there were poor (or reckless) investment decisions, perhaps not. This article doesn't really provide any information to judge that.

As for the management fees, $25m/year does strike me as being a little high, but not totally out of line for such a large pension fund. Remember that if you put $6B into average mutual funds, you will be paying about $60m/year in fees. Investment help is not cheap.

 

[novaqt]

TechBoy:

I believe you hit upon the question being set forth in the article. Why is the forensic analysis of United's plan being avoided?