On Nov 20, 9:38*pm, wrote:
On Tue, 20 Nov 2012 19:49:00 -0500, wrote:
On Fri, 16 Nov 2012 11:43:06 -0800 (PST), wrote:

On Friday, November 16, 2012 1:32:48 PM UTC-5, Bob F wrote:
Just another company that clearly did not properly fund its pension obligations,
then dumps the obligations onto the public.

Pensions have been an unsustainable business model since day 1.

Not necessarily true. *It *is* possible to fully fund even a defined
benefit retirement program.

The only way a pension system works is if the business continually grows, and continually improves its profit margin.

No. *See above.

It's the production of the current generation that pays for the pension of the previous generation. When there are fewer people putting in than taking out, it's only a matter of time before the system collapses.

No. *See above.

This happened to Kodak, and now Hostess.

The problem with all of this is "properly funding a pension plan"
depends on investments and you need to liquidate the investments to
pay the retirees. That depresses the market for those securities and
devalues the investments meaning you have to liquidate more next time
to get the same amount of money.. It might end up being a downward
spiral.

The world stock markets, the US being the best example,
are clearly large and liquid enough that any pension fund
selling off some of it's holdings to meet obligations is
going to have a negligible effect on the price of the
securities. Sure, if some big pension fund was dumb
enough to dump all of it's holding in one trade or one
day, it could have a significant effect. But that is not
how it's done. First the fund is distributed over many
securities, so any individual postion is only a small
percentage of the whole fund. And second, they only
liquidate a portion of any particular security at a time.