Reset Password
Reset Link Sent
| Blogs > victorylee0516 > Shy Asian Girl |
|
Changing Trend of US Pension Plans - 3 (Continued) traditional pension plans of many major US companies used to place a lot of value on the experience of long-term older employees by increasing the pension money rapidly and nonlinearly for long-term employees as their age + service year increases beyond the threshold of the rule of 75. Most long-term employees cross this critical threshold at about the age of 55. On the other hand, the early retirees incur very heavy penalty in pension and in other associated retiree benefits (e.g., employer paid medical insurance, employer paid life insurance, death benefits for family, etc.) when they retire before they meet the rule of 75. However, in recent few years, many large US corporations are switching from their traditional retirement pension plans to the new portable Cash Balance Plans. The new portable cash balance plans are much more favorable to the younger employees but are very unfavorable to the long-term older employees. Some older long-term employees found that when their employers switched from the traditional pension plans to the cash balance plan, their pensions were reduced by 30% to 50%. One of the implications of this trend towards the new cash balance plan is that the US corporations are now placing more value on the higher creativity and adaptability of younger employees and less value on the experience of the older employees. This is consistent with the accelerating pace of innovations and technology advances. The creative and dynamic younger employees are better positioned, than the older employees do, to keep up with the faster pace of technology advances. |
|||
8/28/2008 4:22 pm |
because of life expectancy.. if they feel they have to pay over a longer period of time for early retiree's they are willing to pay less in payout premimums.. thats why when the life expectancy was 72, the SSI figured if people retired at 65, they'd only have to pay for 7 years.. on an average, but now people live into their 80s and beyond.. they want to make retirment age later, and make it so they get a smaller amount if they retired at 62.5 but if they retire at 70 they get more, because they don't expect to pay as long.. economist have long ago tried to lay out the payment structure based on expected longevity.. and SSI studies this long before they instituted the system of SSI
|
