[BlackJack]

This is a shocking article. I feel sad for the honest working stiffs, and then you think of the pump and dump billionaires who lied about earnings and sold at the top. It really stinks. Capitalism without close regulation looks terrible. It looks like scam city.

[VRW Conspirator]

It will be worse when most of these retire. The funds could dry up one way or another. Then it is up to the gubmint to bail it out, as usual.

[MissBaby]

I am no expert in this and perhaps with the rebound of the stock market my thoughts are off, but it occurs to me that every month pension funds (401K's) invest in the market and somewhere someone is laughing as every month they calculate the bounce for the pension money dumping in and sell at just the right time.

Stock market down - pension money goes in - stock market goes up - profits (worker pensions) are taken - market goes down.

Now I will sit back and wait for those much smarter than me in these matters to reply.

[conservatism_IS_compassion]

. . . and then there's Social Security. 15% of your salary goes there. 10% of your salary, saved and invested conservatively, would make your retirement comfortable.

Your 15%? The government already spent it, and needs to rip off your children and grandchildren to pay you anything. Sorry. It's for the children, don't you know . . .

[Askel5]

Capitalism without close regulation looks terrible. It looks like scam city.

What with all the Five-Year Plans, the Number Ones, the liquidating of the masses and re-organizations by Region ... it acutally looks a lot like communism.

[spunkets]

"It looks like scam city."

It's rat scare propaganda that always spews forth prior to an election, vote, or court decision. It's how they operate.

[Iconoclast2]

Scam City works when everybody knows that it is Scam City, and workers save for their own retirements, and know that you divide your money among five or six banks, because banks can fail. Self reliance and capitalism are compatible. It is only when the biggest Scam artist of all, the Government, tries to protect everyone that it puts far more people at risk.

[Trust but Verify]

What are you alleging with the statement about capitalism without regulation? There is PLENTY of regulation. Perhaps too much. This particular article doesn't lay out a convincing case for immediate alarm. I'm not sure it's that big a deal at this point in time. Companies have 'gone under' leaving the PBGC holding the bag for many years. When the economy picks back up and the stock market recovers, everything will be fine again.

[staytrue]

The govt. (ie. taxpayers) will be forced to bail out these "working stiffs". The taxpayers, not them, will be stiffed.

[OldFriend]

Much of this belongs at the door of Levitt of the SEC during clinton's term. The SEC was just as bad in not monitoring the brokerage firms. Now they all walk away with millions and the average stockholder is broke.

[Toddsterpatriot]

This is a shocking article. I feel sad for the honest working stiffs, and then you think of the pump and dump billionaires who lied about earnings and sold at the top. It really stinks. Capitalism without close regulation looks terrible. It looks like scam city.

What about the poor taxpayers who put 15.3% of their paychecks into Social Security? A 20 year old starting work today will lose something like 2% on their contributions. I'll be lucky to break even. Give me a 401K over Social Security anyday. When the market recovers (in 10,15,20 years) I'll be fine, Social Security will still suck.

[vikzilla]

Well this is the way I understand it. When the company I work for hired me they put a lump some into the pension account.(traditional pension- 401k is separate) This grows for the period of my employment. Lets say 30 yrs. The amount is actuarily determined using my age,expected retirement age, and return on investment.

These investments grow or lose money for the period of my employment. At any given moment they may or may not be completely funded. If certain % are reached, they are forced to make up the difference actuarily(?) or are allowed to stop making payments into the fund if it reaches % that show an overvaluation of the fund.

When I first started they and I made payments. About 7 yrs ago the markets were doing well enough so that they were no longer required to make these payments. This continues today, even though the fund has taken an enormous hit in the last few years.

A few years ago when the pension fund was way overfunded they were allowed to offer early retirement inorder to control wages etc.

For some to scream "catastrophe" I believe to be a bit of an over statement

How long have they been underfunded and when are companies required to make up the difference. My guess is its done over a period of years and not a snap shot of the economy.

I agree with an early poster, this is a 'RAT trap.

[The Duke]

Capitalism without close regulation looks terrible.

Wrong! We're being played for suckers - it's capitism without enforcement of existing laws that looks (and is) terrible.

And why is there little or no enforcement? Because those who would be going to jail are those who have already purchased our politicians.

The reason there's this emphasis on "regulation" is to distract us from the issue of enforcing existing laws.

Ultimately there will always be one means to right the ship - and that is through significant devaluation of the dollar (aka "inflation").

[lds23]

British insurers are in big trouble for this very reason. Instead of just making money on the actuarial spreads, they invested in equities to boost returns. Now they are sucking wind.

[Blue_Ridge_Mtn_Geek]

Underfunded private pensions are only the (relatively tiny) tip of the iceberg. For a good summary of the challenges facing aging people (and those who are being taxed to fund the state's promises to them), see:

Gray Dawn: How the Coming Age Wave Will Transform America-And the World
by Peter G. Peterson

Reviews and selection of pages for browsing may be found at

http://www.amazon.com/exec/obidos/tg/detail/-/0812990692/qid=1030494908/sr=1-6/ref=sr_1_6/002-7397905-6952818?v=glance&s=books

[Blue_Ridge_Mtn_Geek]

Underfunded private pensions are only the (relatively tiny) tip of the iceberg. For a good summary of the challenges facing aging people (and those who are being taxed to fund the state's promises to them), see:

Gray Dawn: How the Coming Age Wave Will Transform America-And the World
by Peter G. Peterson

Reviews and selection of pages for browsing may be found at

http://www.amazon.com/exec/obidos/tg/detail/-/0812990692/qid=1030494908/sr=1-6/ref=sr_1_6/002-7397905-6952818?v=glance&s=books

[Congressman Billybob]

As I point out in my latest book, second link below, it is not just the pension funds that invested in Enron, Global Crossing and the like that are in trouble. "When one giant falls, the other giants stagger and bleed." ALL pension plans are in trouble, just some worse than others, because of current corporate disasters and their effect on the stock markets in general.

If there is a pension plan meltdown now, it will make the Savings & Loan Crisis in the 1980s look like a day at the beach. That disaster cost $175 billion to fix, then. In current dollars, that would be $352 billion, or 48 WorldComs at one time. And a pension plan collapse would be much larger than the S&L crisis.

We discussed the risk to pension plans, the S&L bad example, and the risk to Social Security, in this book. Have a look and see if you like what you find.

Congressman Billybob

Click for latest column: "Memo to CBS about Bill Clinton."

Click for latest book: "to Restore Trust in America"

[esopman]

Unfortunately, those of us familiar with the economic underpinnings of these 'defined benefit' pension plans have been aware of the problems for the last couple of years. The predication of targeted retirement plan proceeds on returns from equities above the AAA corporate 'safe money' rates was folly. And yes, our tax dollars will go to work on this in the next few years. Big government is a quite inefficient intermediary here, but the Democrats will still make a lot of noise about this.

[rockfish59]

Seems my union (Laborers) is in on it too. They recently claimed that due to the 'dramatic increase' in medical & prescription drugs, that they will be raising all pensioners (me) monthly payments. I have been paying $87 a month out of my pension for coverage. After that and taxes I am left with $828 to live on. Now, they want to jack up my med payment to $437 a month which leaves me $391 to live on. Isn't that grand?
HAH!
I told them to stick it where the sun don't shine and I will find another provider and to keep their damned paws OFF my pension. I didn't bust my @$$ for 20 years just to line their damned pockets.
The union has its good points, but they are mostly run by commie/dimwitocrats, and I always hated them for using MY DUES to get @$$holes Bubba & Gort elected.
I guess they must figure that all members walk in lock step to their propaganda.

sKrEW them!!

[Eternal_Bear]

Don't worry the attack on Iraq will solve eeverything!

[Dead Dog]

Capitalism without close regulation looks terrible. It looks like scam city.

Actually, I would the put blame on government regulation and communist-soak-the-rich tax policy. Pump and Dump Billoniars, usually liberals, are a product of social engineering through taxation.