More scams on pensions

To make things worse for workers, the new transportation bill allows companies to base their contributions to their pensions on the basis of the last 25 rather than 2 years.  By assuming a higher discount rate, they have less need to fund their pensions, assuming a high rate of return.  For pensions to survive they must aim at a higher rate of return to compensate for lower contributions, creating an incentive to invest in high risk junk sold by the financial system — a recipe for disaster.

1 comment so far

  1. mark hansen on

    in the summer of 1970 i found myself in mpls, mn one day i passed an empty lot that took up at least one square block.
    the lot was covered in large gravel and surrounded by a chainlink fence topped with barbed wire.
    asked after it to some people who lived accross the street. they informed me it was the location of the then infamous white motor co. which had gone bankrupt after bleeding its workers pension dry.
    it was after that particular disaster that the feds started backing company pensions with taxpayer dollars so that they could drain their treasuries and their retirees could still get a portion of the pensions they had been promised in return for not demanding higher immediate wages.
    this new system looks to be another way to make the taxpayers cover the costs of the false promises made by the 1%.


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