On Dec 13, 11:38 am, Mark Rand wrote:


Can someone please explain to me how in hell it is possible for businesses to
be allowed to pay pension benefits from current receipts? This liability
should be funded entirely from investments separate from the business. The
contributions from the business and the employee should be invested at the
time the liability is created. The only organizations that can justify paying
pensions out of current receipts are governments and that's only because they
_can't_ go bankrupt.

Mark Rand
RTFM

Yes, I have wondered about this, but was told my limited knowledge of
Economics was at fault, that I didn't comprehend that for you and me,
if we wanted a cup of coffee, we had to pay $2 upfront. In the
business world, you just promise to pay at some later date, and are
given pieces of paper as securities. Which may turn out to be
valueless.

Its not unique - our state government of a decade ago, in financial
straits, decided that employee pension contributions would go straight
into General Revenue rather than be invested along with the Govs
contributions in a 3rd party fund. Future payouts to the retirees were
to be paid from normal Gov. day to day revenue. This fell in a heap
after a while as there wasn't enough money coming in to pay the
retirees. Our next Premier, a conservative, did a massive slash and
burn operation to get the books in order, which, unfortunately, meant
a lessening of retirement benefits.

So. To me, it seems that the economy is run by people solely
interested in their own profit and position, most of the rest of us
don't understand the smoke and mirrors of how they do it. And the so
called regulators? - well, they can stand on their record of prudent
management, not.

Unfortunately, NO political system seems to have factored in human
greed - it assumes that everyone will act in an honorable manner. This
is plainly ludicrous, so abandoning any attempt at regulation is
obviously doomed to result in the mess we have now.

But then, I don't understand "economics" so I have probably got it
all wrong....

Andrew VK3BFA.