Well Ex, Here we go... Again. I'm not, by any means, a pension expert. I don't have a need to be, so feel free to correct me if I'm wrong. I'm always willing to learn.
The Taxpayer, via their elected representatives, do have involvement. I don't like it, but it is true.
The participants (employees), had an agreement, most going back MANY years. Your Government has changed the rules, more than once, sometimes benefiting the beneficiaries, sometimes not.
Pension plans have been regulated and future retirees, over the years have been given guarantees, by your US government.
Pension Benefit Guaranty Corporation - PBGC A non-profit corporation that functions under the jurisdiction of the Department of Labor and that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits.
This federal corporation was established to ensure that defined-benefit plan participants aren't left out in the cold if there isn't enough money in the pension plan to meet the needs of people about to retire (i.e. in the event of a pension shortfall).
Let's also understand that these defined benefit plans ARE NOT ONLY promised to Teamsters. These plans cover state and local government employees,
teachers, police, firefighters, among others.
- Private single-employer plans - The vast majority of "private" plans offered by companies fall in this category, with about 26,000 U.S. plans covering more than 30 million participants, according to the PBGC.
- Three layers of security support benefit promises of these plans:
- current assets and investment results
- contributions that employers are required to make to keep plans funded
- guarantees provided by the PBGC in case these plans are not able to meet obligations
- Private multiemployer plans - These plans are negotiated by unions on behalf of workers at multiple companies. They have been steadily declining and as of 2010 insures about 1,460, representing approximately 10 million participants, according to the PBGC. As of 2008, the multiemployer program's net position declined by $396 million increasing the program's deficit to $869 million. They have the same three-legged support as private single-employer plans, except contributions are made by more than one employer.
PART of the accurate funding problem, for these plans is the fact that people are living longer. Most assets can be valued accurately, but the valuation of liabilities is far more complex. Performed by a qualified
actuary, liability
valuation must include an estimate of how many participants will qualify for benefits and how long those participants may live.
Ex 396, you and everyone else who think that participant's promised benefits should just be cut, need to know that certain promises were made. Not just by the companies, and unions, but also promised protection by your Government. The highest amount of liability, and burden to guarantee, lies on these entities. Those who had agreements with the above, it seems to me, should have the least amount of exposure to loss.
You know I'm not a Big Government guy, but promises made should be promises kept, up to the amount provided by law..
Sources:
http://www.investopedia.com/terms/p/pbgc.asp
http://www.investopedia.com/articles/retirement/08/safe-db-plan.asp
http://www.pbgc.gov/