RE: RE: The future is anything but friendly.......Once again TechPerson I obviously need to clarify my comments and your response to them.
With regard to the GlobeInvestor 7 part series on the current status of Canadian pension plans, I indeed have been carefully, and with great interest, reading each and every one of them.
I am especially interested in the one for tomorrow - part 6 - to see how some dude retired very early and still plans on taking care of his retirement needs on his own as I have.
So, with regard to my statement that excessive union demands over the years in their defined benefit plans has greatly exacerbated the current depressed financial state of the auto sector__well you are correct in that I should have used had instead of has and recent instead of current to be perfectly correct.
The reason being is that, as you well know, the auto unions did finally bite the bullet and took some major concessions__and pretty much all of the concessions were in the area of benefits, work rules and pensions__NOT so much wages for the current remaining workers__which I think was an excellent solution to the alternative__that being bankruptcy and no job at all.
So the auto workers have done their bit already and hopefully it hasn't been too late for them!
However, I would be very cautious believing everything Obama's politically appointed so called car czar stated with regard to the terrible management at the top of GM and Chrysler__just my spidey senses developed over the decades watching politicians and their appointees at work!__Enough said on that!
Now let's get into that bit about how badly defined benefit pension plans currently are underfunded as per the GlobeInvestor series.
The way I see it there really are only a combination of 3 ways for underfunding to result__Not enough investment return on the pension fund assets__Too much being paid out to retirees__And not enough fresh capital being put into the pension plan.
So it is the latter 2 that I was referring to with regard to how the unions had their PART in creating the current large pension deficits which have gotten so large in many high profile cases that they are threatening the very financial survival of many very large companies__and thus also the very pensions that the retirees fully expected to have in their golden years.
Again, in the case of the CAW, until the recent concessions were finally made, they had succeeded in getting over the course of the past few decades__along with the usual strikes to back up their demands__ever increasing pension benefits pretty much with every new contract.
However, at the same time, the CAW wasn't agreeing to any equivalent increases to the contributions their members would make into the pension plan__in fact it wasn't that long ago that they made NO contributions whatsoever__their argument being that their contributions were being made by NOT demanding even more actual wages and other benefits than they did with each strike!
Thus with the ever increasing pension benefits, with no significant increases in fresh capital coming into the plans, this then over a few decades set up the perfect storm for the current hugely underfunded pension plans referred to in the GlobeInvestor series.
And really the only way to fix this structural problem is, for sure, increase the contributions being made by the workers__as was done with the CPP starting about a decade ago, whereby over 5 years or so the annual contribution rate for all Canadian workers was basically doubled__that is how much it took to get the CPP on a fully sustainable basis as it currently is.
The only other way would be to reduce pension benefit payout rate__but I am pretty sure that this would be a much less palable option for most workers if they were asked for their opinions?
All of these issues of course will apply to Telus and the TWU and it will be interesting to see next year how these issues are dealt with.