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End Saturday delivery,

Everyone seems to be saying this, but I completely disagree. End Tuesday delivery. Heck, end M-W-F delivery. But Saturday delivery is actually pretty important, and if you can't lay anybody off you might as well KEEP Saturday delivery and get rid of the others. Why? Because many times a package is required to be signed for, and if you work, that's difficult to do. Or if you need to mail a package, it's difficult to do during regular post office business hours. Since most people don't work on the weekend, Saturday delivery and post office hours make far more sense than other days during the week.

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KD in CT answered this at length, but let me clarify the key point: 100% funded doesn't mean what you think, and the money isn't just sitting there. 100% funded means you have invested enough money now so that it is estimated to grow into enough money later. In other words, if you expect to cut a $50,000 pension check in 20 years, paying $5,000 into the pension fund now makes it 100% funded. That $5,000 isn't sitting in a vault, it is busy becoming the required $50,000.

 

In some sense it's like a 401k - a certain amount of your money is set aside for your retirement. The difference is that investing involves risk. With your 401k, your money might grow slower or faster than you expect. With a pension, you get what you expect, and the company gains or loses on the investment.

 

 

Which introduces another wrinkle that is popular with those running defined benefit plans. What happens when your calculations say that you haven't put away enough to end up with $50,000 at retirement time? Simple --- just fudge the assumed rate of return on your pension assets! That's been happening for years at the government level.

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Which introduces another wrinkle that is popular with those running defined benefit plans. What happens when your calculations say that you haven't put away enough to end up with $50,000 at retirement time? Simple --- just fudge the assumed rate of return on your pension assets! That's been happening for years at the government level.

 

It also shows an unintended consequence of pensions and government regulation. What happens to a company in a bad economic downturn and in which the stock market drops 20%? Just when they need their cash the most to get through the slow-down, the value of their pension funds drop requiring them to shore that up instead.

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KD in CT answered this at length, but let me clarify the key point: 100% funded doesn't mean what you think, and the money isn't just sitting there. 100% funded means you have invested enough money now so that it is estimated to grow into enough money later. In other words, if you expect to cut a $50,000 pension check in 20 years, paying $5,000 into the pension fund now makes it 100% funded. That $5,000 isn't sitting in a vault, it is busy becoming the required $50,000.

 

In some sense it's like a 401k - a certain amount of your money is set aside for your retirement. The difference is that investing involves risk. With your 401k, your money might grow slower or faster than you expect. With a pension, you get what you expect, and the company gains or loses on the investment.

 

 

Which introduces another wrinkle that is popular with those running defined benefit plans. What happens when your calculations say that you haven't put away enough to end up with $50,000 at retirement time? Simple --- just fudge the assumed rate of return on your pension assets! That's been happening for years at the government level.

 

 

It also shows an unintended consequence of pensions and government regulation. What happens to a company in a bad economic downturn and in which the stock market drops 20%? Just when they need their cash the most to get through the slow-down, the value of their pension funds drop requiring them to shore that up instead.

 

Yes to all of the above which explains why pensions of corporations in the private sector have undergone a sea change in the past twenty years from defined benefit to defined contribution plans.

That's the crux of the issue of defined benefit public sector pensions. They are strangling taxpayers on the local, state and national level. It's an unsustainable situation.

Hell, the private sector tore up the social contract with employees two decades ago. The public sector is sucking taxpayers dry.

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