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Assumptions about future pension returns may have to be lowered.
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As the returns from the individual retirement accounts fatten future pension checks, they say, the mandated benefits would be cut back and Social Security would be solvent until at least 2075 -- without having to raise the 12.4percentt payroll tax.
Each year, G.M.'s work force accumulates about $6.3 billion of future pension benefits, he said, and the company expects its average investment returns on the pension portfolio to more than cover that amount.
The pension schemes may create additional returns to current wage income vis-à-vis future pension benefits.
Low interest rates make future pension obligations look very large because they serve as a proxy for the rate of investment return on the pension fund over time.
The bigger the rate of return, the less money has to be in the bank now to fund future pension payouts.
Future pension benefits will be reduced sharply.
Delphi's future pension obligations alone are valued at $8.5 billion.
Janitorial services were outsourced, eliminating the future pension cost burden.
Nor did she get a stake in any future pension.
I also agree reasonable pension returns should be used.
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