Why has the private sector moved away from Defined Benefit Plans, whereas the public sector is just recently waking up to the issue of extreme funding gaps? What role may “accountability” play in the difference between private and public sectors?
Most firms with Defined Benefit pensions choose to measure pension expense with expected, rather than actual, returns on their pension plan assets. This reduces volatility of income, since actual returns (market value changes), can greatly fluctuate. Actual returns, however, are disclosed. So, who cares (and why do they) if firms switch to using actual returns in measuring pension expense?
Can you name a few of the major, recent contributing factors to the $440 billiion under funded status of defined benefit pension plans?
Which pension plan shifts the burden of retiree income to the employer: Defined Benefit or Defined Contribution? In your opinion, who should bear the pension related consequences of American Airline’s bankruptcy filing?
In bankruptcy, should bondholders come first or pensioners? What are the implications of your choice?
