Yet More Bad Ideas from the Pension Sector

Well, it appears that those companies that still have traditional pension plans want Congress to give them a waiver so that they do not have to make contributions during this downturn.

They think that it will be too much of a burden, and it may force them to cancel these plans altogether.


Hmmmm....It seems that this problem started when they went with highly aggressive investment plans in order to minimize their contributions, and then they got caught in the dotcom bubble.....And after that, they wanted more liberal rules so it wouldn't be a burden.

Basically, they are saying that they don't want to buy when the market is down....which is half of the classic investment goal "buy low and sell high" as I understand it....So they are asking for permission to piss their money down the drain with a poor investment policy.

Note that GM, has largely moved out of equities, and so were largely insulated from the downturn....I would also note that this strategy also reduces the costs of managing the funds.

Is it just me, or has every "innovation" in pensions and pension funds over the last 30 years had the effect of actually decreasing return on investment.

That's kind of like the rest of the financial sector: You get sold a bill of goods by an investment bank, and they get lost of fees, and you get the hole in the doughnut.