A Pension Game of Risk: Key Issues Around the World
An Phung is a multimedia journalist based in New York City. She has contributed to NYTimes.com, Patch.com and City Limits. She also spent time reporting in Indonesia where she covered stories about the country's growing illicit drug trade. An graduated from CUNY Graduate School of Journalism with a concentration in international reporting.
Follow me on Twitter @anhaiphung
What is the Big Idea?
Ford and General Motors might be setting the new standard for U.S. companies when it comes to managing pension obligations. G.M. reduced its pension liabilities by $26 billion earlier this month by offering lump-sum payments to thousands of retired white collar employees to reduce its pension obligations, which are the biggest in the nation.
Pension obligations have been a thorny issue for boardroom executives since the start of the millenium and the problem isn't limited to the U.S. The rest of the world feels the sting as well.
Dr. David Blake, Professor of Pension Economics at Cass Business School, gave us a global perspective of the pension problems in the U.S., U.K, Canada, Holland and Ireland.
Watch Professor Blake talk about the key pension issues around the world:
What is the Significance?
Problems vary form country to country. And the solutions leave some of us better off than others. Canada and Holland both have better pension schemes and the U.S. will "end up with much lower pensions than Dutch retirees in 20 years time," says Dr. Blake.
Yet with all these varying issues and outcomes, they all have this in common: companies are pouring billions of dollars into pension schemes to fulfill its obligations, but persisting deficits means much of this financial support is all for nothing.
The U.K.’s largest 350 companies put £20 billion ($31 billion USD) into their direct benefit (DB) schemes over the 12 months to March 2012, yet deficits increased by £17 billion, according to a Mercer report. At the end of 2011, the S&P 1500 companies contributed an additional $70 billion to their pension plans over the course of the year, yet deficits increased by $169 billion to reach $484 billion in the U.S.
"This pattern repeats across all major developed countries as corporations do battle with a number of risks, which, left unmanaged, promise to threaten the future stability not just of their pension plans but of the very businesses that underpin them," says the report.
About “Inside Employers’ Minds”
“Inside Employers’ Minds: Confronting Critical Workforce Challenges” features a dedicated website (www.mercer.com/insideemployersminds) which contains a number of resources focused on addressing each key issue.
Photo courtesy of Gunnar Pippel/Shutterstock.com.
Delay, deny and deflect were the strategies Facebook has used to navigate scandals it's faced in recent years, according to the New York Times.
- The exhaustive report is based on interviews with more than 50 people with ties to the company.
- It outlines how senior executives misled the public and lawmakers in regards to what it had discovered about privacy breaches and Russian interference in U.S. politics.
- On Thursday, Facebook cut ties with one of the companies, Definers Public Relations, listed in the report.
Protected animals are feared to be headed for the black market.
Sure we know it would be bad, but what do all of these scary numbers really mean?
- At the press time, the value was $21.7 trillion dollars.
- Lots of people know that a default would be bad, but not everybody seems to get how horrible it would be.
- While the risk is low, knowing what would happen if a default did occur is important information for all voters.
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