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    « Births vs. deaths | Main | Rejecting and denouncing rejecting and denouncing »

    March 26, 2008

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    Mr Punch

    Well, sure -- if you cover only about half as many of your former employees, you can pay them about twice as much for the same cost.

    Two real points here: (1) private-sector pensions must vest in 5 years, while the public sector can go longer (10 years in Mass.); (2) [most] public pension have rather favorable COLA adjustments, while [most] private defined benefit ones don't, so private-sector retirees are very vulnerable to inflation -- one reason for the shift to defined contribution investment plans was the discrediting of old-style pension plans by the inflation of 1967-82.

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