These are all private plans. The reason there has been no action is that this is not a public crisis. This has been foreseeable (and foreseen) literally for decades. PBGC explicitly has no federal funding component.
This has always seemed to me to be a gamble agreed to by both the providers and recipients of private pensions over the years; they could have chosen to make them securely funded, but that would have resulted in smaller pensions and lower immediate salaries. Instead, they chose to take more money immediately, with the promise/hope for higher pensions funded by future providers. The gamble was whether they could find future payers when the bills came due.
I suspect that the huge financial cost of the reaction to Covid is going to reduce the willingness and ability to provide a massive outlay to the subset of retirees with bankrupt private pensions.
I fear that we are going to start testing what level of destruction can be done to the world reserve currency.
I didn't write about it here, but in prior posts I have.
The reason I thought Central States might be bailed out is the political importance of the specific group -- concentrated in specific states (retirees are mostly where they had been working) that were/are swing states. Note which politicians (doesn't matter Repub/Dem) have been the MEP bill sponsors -- basically where Central States is active.
Many outside those states or not trying to have national results will not feel the pressure.
We have seen private-sector bailouts in the Great Recession (GM, anybody?) which was a bailout of their pension fund, essentially. This is why I think Central States has a non-zero chance of partial bailout: political importance.
I know you have, and I appreciate the thought you put into the topic. Honestly, I trust your assessment of what will happen better than mine; I just feel like Quixote responding to any post arguing that rescuing various private pensions (including PBGC) is something the federal government HAS to do. I wrote the same useless posts about bailing out Fannie and Freddie, which also explicitly said they had no federal backstop right until they needed one.
The coming retirement crisis is the slowest moving, most inevitable crisis of our lifetimes; there appear to be many, many people completely unprepared for life after working. Those with unfunded private pensions are just a subset; a subset that had more capacity to save and prepare for the future than did many of those who made even less money in their working career.
The coming public pension crises appear even worse :)
These are all private plans. The reason there has been no action is that this is not a public crisis. This has been foreseeable (and foreseen) literally for decades. PBGC explicitly has no federal funding component.
This has always seemed to me to be a gamble agreed to by both the providers and recipients of private pensions over the years; they could have chosen to make them securely funded, but that would have resulted in smaller pensions and lower immediate salaries. Instead, they chose to take more money immediately, with the promise/hope for higher pensions funded by future providers. The gamble was whether they could find future payers when the bills came due.
I suspect that the huge financial cost of the reaction to Covid is going to reduce the willingness and ability to provide a massive outlay to the subset of retirees with bankrupt private pensions.
I fear that we are going to start testing what level of destruction can be done to the world reserve currency.
I didn't write about it here, but in prior posts I have.
The reason I thought Central States might be bailed out is the political importance of the specific group -- concentrated in specific states (retirees are mostly where they had been working) that were/are swing states. Note which politicians (doesn't matter Repub/Dem) have been the MEP bill sponsors -- basically where Central States is active.
Many outside those states or not trying to have national results will not feel the pressure.
We have seen private-sector bailouts in the Great Recession (GM, anybody?) which was a bailout of their pension fund, essentially. This is why I think Central States has a non-zero chance of partial bailout: political importance.
I know you have, and I appreciate the thought you put into the topic. Honestly, I trust your assessment of what will happen better than mine; I just feel like Quixote responding to any post arguing that rescuing various private pensions (including PBGC) is something the federal government HAS to do. I wrote the same useless posts about bailing out Fannie and Freddie, which also explicitly said they had no federal backstop right until they needed one.
The coming retirement crisis is the slowest moving, most inevitable crisis of our lifetimes; there appear to be many, many people completely unprepared for life after working. Those with unfunded private pensions are just a subset; a subset that had more capacity to save and prepare for the future than did many of those who made even less money in their working career.
The coming public pension crises appear even worse :)