More Problems in Pension Land
Why You Need to Be Financially Independent
Interesting item today that US Airways (which went into Chapter 11 bankruptcy last week, again!) missed a $110m payment due to it's pension scheme. Employees do have some backup, in that the scheme is supposed to be insured by the Pension Benefit Guarantee Corp ( a US Federal Agency). The bad news is that the PBGC would be "insolvent" if it were a private insurer, according to a recent report!
This is just another indication of the looming pension crisis in the Western world. Governments are not going to be able to make the payments they have promised (from today's "Daily Reckoning" - "The Social Security Board of Trustees has come up with a new measure of the unfounded “fiscal gap” between what the federal government can expect to receive in revenues and what it has promised to pay. The number - $72 trillion - comes to nearly seven times the size of the nation's annual GDP and nearly 50% more than the value of all the assets tucked away in every burg and backwater in the entire country. In technical, accounting terms...as the Great Mogambo might say...the whole freakin' country is broke...") and even private pension schemes will be under stress, particularly in the USA.
What's the solution? As Robert Kiyosaki ("Rich Dad, Poor Dad") says, you need to build your own "ark". Check out "Rich Dad's Prophecy" for more on this topic. I don't agree with everything Kiyosaki says, but his analysis is spot on and all his books contain valuable material.
Interesting item today that US Airways (which went into Chapter 11 bankruptcy last week, again!) missed a $110m payment due to it's pension scheme. Employees do have some backup, in that the scheme is supposed to be insured by the Pension Benefit Guarantee Corp ( a US Federal Agency). The bad news is that the PBGC would be "insolvent" if it were a private insurer, according to a recent report!
This is just another indication of the looming pension crisis in the Western world. Governments are not going to be able to make the payments they have promised (from today's "Daily Reckoning" - "The Social Security Board of Trustees has come up with a new measure of the unfounded “fiscal gap” between what the federal government can expect to receive in revenues and what it has promised to pay. The number - $72 trillion - comes to nearly seven times the size of the nation's annual GDP and nearly 50% more than the value of all the assets tucked away in every burg and backwater in the entire country. In technical, accounting terms...as the Great Mogambo might say...the whole freakin' country is broke...") and even private pension schemes will be under stress, particularly in the USA.
What's the solution? As Robert Kiyosaki ("Rich Dad, Poor Dad") says, you need to build your own "ark". Check out "Rich Dad's Prophecy" for more on this topic. I don't agree with everything Kiyosaki says, but his analysis is spot on and all his books contain valuable material.
posted by Kevin Francis at
10:11 am
