September 22, 2012 - No. 35
In the Parliament
Harper Government's Insidious Attack on
• Harper Government's Insidious
Attack on MPs' Pensions
For a Pro-Social
• Workers Discuss Pension Reform
• DBRS Neo-Liberal Study of
Pension Plans -- Parts 1-4 - K.C. Adams
In the Parliament
Harper Government's Insidious Attack on
Members of Parliament
should stand with Canadians and
the necessity for
pro-social pension reform and denounce the Harper government's attack
their pension plan. Making MPs' pensions an issue in Parliament is a
publicity stunt to justify the ever growing assaults against the public
public right and, specifically, to attack the right of Canadians to
standard defined-benefit pensions acceptable to themselves.
Highlighting MPs' pensions which are superior to those
of most Canadians
is a cheap neo-liberal trick to open an attack directly on the
pensions of public sector workers and others. The assault on MPs'
to divert from the real issue that government has failed to guarantee a
defined pension for all Canadians with benefits paid directly from
public revenue collected from all public and private enterprises based
gross income. The independent politics of the working class favour
pensions for all. This would be a great step forward in a new direction
strengthen the Canadian economy and the security of all throughout the
lifecycle of childhood, maturity and retirement.
A neo-liberal anti-social line is to attack the
universality of a social
program or in this case, to highlight a specific group that has the
direct government funds towards its pension benefits. The fact that a
group has a position of privilege and receives defined pension benefits
certain members of that group are said to be unqualified because of a
of interest or in possession of great personal wealth is being used to
the entire social program of defined-benefit pensions.
Misusing the reality that eleven million Canadians have
no pension plan
at all, Harper targets MPs, public sector workers and other Canadians
have defined-benefit pensions. Harper is using his attack on MPs'
push his neo-liberal austerity agenda to lower the standard of living
Canadians so that the economy can be better milked to pay the rich
conditions of recurring economic crises.
Liberal MP Marc Garneau found himself sucked into the
and is quoted by Globe and Mail saying that he is "ready to
what every other Canadian does by facing pension changes. I'm prepared
accept lots of changes because that is what Canadians want and also
Canadians are very concerned about their own pensions at the moment."
The changes Harper and Garneau have in mind are not for
the better. The
changes are to drag all Canadians down to a level without
pensions instead of raising everyone up to security in retirement.
"very concerned about their own pensions at the moment" and want the
situation resolved in a pro-social direction that favours them.
pensions will not solve any problem in the economy but will increase
propaganda against defined-benefit pensions for all.
Concerned Canadians demand to know how playing along
with the Harper
dictatorship's attack on public sector workers' pensions is going to
their retirement security. It will not. Conciliating with the
neo-liberal attack on
any pension makes Canadians more nervous and vulnerable because it
right into Harper's broad assault on pensions under the backward banner
Garneau added to his posture of seeming to want a direct
role within the
Harper dictatorship saying, "We've seen what this government plans to
[Old Age Security], we've seen the fragility of the economy, so yeah.
all in this together and we're ready to do our bit."
The "fragility of the economy" arises in large measure
government refuses to renew the economy under the pro-social banners:
paying the rich! Increase funding for social programs! Manufacturing
The government agenda is to support the global
monopolies and their
monopoly right to deprive the people of their public right to
livelihoods, pensions and the building of a self-reliant diverse
on manufacturing. The austerity agenda is to ensure the economy is
paying the rich even under conditions of economic crisis.
Defined pension benefits for all at a Canadian standard
would boost the
economy and promote its extended reproduction. Instead, the Harper
dictatorship has already raised the pension age to 67, has allowed many
monopolies to renege on their pension obligations by using the
courts to change the promised contracted arrangement, and has opened a
front against public sector and other defined-benefit pensions.
William Robson, president of
the capital-centred C.D.
Howe Institute is
most incensed at a precedent within the MPs' pension plan, which the
class may latch onto as a good and progressive concept for all
MPs' pension benefits are not funded through a savings plan constantly
seeking the highest return and vulnerable to violent downswings, but
general revenue. This concept holds that pension benefits, similar to
come from the added-value the working class produces within the current
Quoted in the Globe and Mail, Robson said,
more troubling about the political pension plan is that it's unfunded
merely paid out of government revenue. There's not one cent backing
promises. It's got to come out of current tax revenue."
That is the main positive point Mr. Robson! Not only is
benefit defined, the claim comes directly from the socialized economy
enterprises active in the Canadian economy. This progressive pension
should be extended and applied to all Canadians. All these pension
plans are vulnerable and could collapse at any time; they guarantee
when challenged and put under pressure by the monopolies. Ask Nortel
how secure their promised pension savings plan and benefits have been
how much can be converted into use-value. Ask retirees and workers of
Papers, who had their pensions cut by up to 40 per cent when Brookfield
Management used the bankruptcy court to deprive workers of their
benefits and subsequently used the courts to block a civil suit.
Important to note as well that right in the midst of the
over MPs' pensions, the neo-liberal Harper front group the Canadian
Taxpayers Federation, which has close ties with the monopoly-controlled
media, was allowed to use a plane to fly its banner around Ottawa
MPs' pensions. Just two weeks earlier, the RCMP had ordered a plane
a banner criticizing Harper to return immediately to its airport.
The Workers' Opposition denounces Harper's anti-social
pensions including MPs' pensions and calls on all Canadians to step up
battle to defend and guarantee the defined-benefit pensions that exist,
the public sector and others, and fight for government guaranteed
pension benefits for all at a Canadian standard.
For a Pro-Social Pension Regime
Workers Discuss Pension Reform
alternative pro-social pension regime and the practical politics
necessary to bring it into being
Within days of each other, the financial ratings agency
Dominion Bond Rating Service (DBRS) declared the imminent death of
company defined-benefit pension plans while the C.D. Howe Institute
denounced as irrational the array of government-sponsored pension
savings plans and lack of defined benefits for
retirees. This contradictory assault on people's consciousness demands
workers step up their own discussion of the situation and develop their
practical politics to bring into being a pro-social pension regime that
makes pensions with defined benefits a reality for all.
The right to a retirement at
a Canadian standard is firmly established; the question is how to bring
this about through conscious acts of working class practical politics.
Lack of money is not the issue. The goods workers produce and services
they provide are more than sufficient to guarantee a retirement for all
at modern Canadian defined standards. Governments refuse to do so and
should be held to account for their social irresponsibility. Big
companies increasingly deny the claims of retired workers to the
defined benefits they were promised and the need for a dignified and
cultured retirement, such as U.S. Steel's unilateral
elimination of adjustments in pension benefits according to price
inflation or by using the fraud of bankruptcy à la Nortel and
AbitibiBowater (Resolute Forest Products). Smaller companies plead that
they do not generate enough constant added-value to meet the claims of
their retirees. The working class does not and cannot accept this
failed pension regime; it must break new ground in finding a pro-social
alternative and bring it into being in a practical way.
Social Capital Under the Control of Workers
The claims of workers on the gross domestic product are
a huge reservoir of social capital that could be mobilized as both a
collective reserve fund for pensions and a source of capital investment
in projects under the control of the working class. The
pooled funds of workers in defined-benefit plans, defined-contribution
plans, RRSPs, Canada and Quebec government pension plans and all other
forms of savings are enormous. The point is to take these funds out of
the hands of self-serving capitalists and put them to use under the
control of the working class. This
would entail restricting the claims of capitalists on workers' savings
and on any added-value produced by active workers in projects,
cooperatives or enterprises financed by workers' savings funds.
Possibilities exist to use social capital under working class control
to fund defined benefits in retirement and build the
nation and its productive capacity in all sectors, especially
Workers have to develop their own initiative as they
face the current reality that both the global monopolies and their
political representatives and parties refuse to take the issue of
defined-benefit pensions seriously. Governments at all levels have
failed to address the pension issue and the big monopolies are
waging a campaign to eliminate company-sponsored defined-benefit
pensions. Even the pro-big business C.D. Howe Institute warns low and
middle-income workers not to put money in the government's new pension
savings plans because Service Canada will simply "claw back" an equal
amount of benefits during
Meanwhile, DBRS goes to great lengths in a press release
and related study to find reasons for companies to eliminate
defined-benefit pension plans and replace them with this or that
savings plan under the control of capitalists. DBRS blames the failure
of the current pension regime on the recurring economic
crises and the inability and refusal of the private monopolies to
manage properly the funds under their control and solve the problems of
workers' retirement. DBRS says such issues are beyond the "core
competence" of companies.
Rather than taking
governments to task for refusing to act in a socially responsible
manner to solve the pension issue, DBRS throws the problem back at
individual workers who are told to fend for themselves through savings
plans. In a strange twist, DBRS suggests that individual workers have
the "core competence"
to solve their retirement problems while the ridiculously high-paid
"captains of industry" and the companies they manage do not have a clue.
In response, the C.D. Howe Institute says having an
individual save for retirement is an absurd approach to a social
problem but does not give any concrete suggestions how to transform the
anti-social pension regime into a pro-social one.
Workers are increasingly frustrated with all of them and
are organizing to force the socialized economy and political
institutions to recognize and serve their collective interests.
Join the discussion and elaborate the independent
positions of the working class to establish a pro-social pension regime
DBRS Neo-Liberal Study of
Defined-Benefit Pension Plans
The Neo-Liberal Chicken Little Story of
the Collapse of
Defined-Benefit Pension Plans
On August 17, the Dominion Bond Rating Service issued a
press release and study entitled "Pension Plans: Discounting into the
Danger Zone." The DBRS press release and study is a broad attack on
workers' rights to pensions and defined-benefit pensions in particular.
DBRS follows a common neo-liberal method
of describing a situation, whether real or not, which reinforces a
predetermined conclusion. The description becomes a form of
storytelling repeated so often and in various ways that the story
becomes an anti-conscious reality. The story continues without debate
towards a predetermined anti-social end that appears
to emerge spontaneously from the story itself.
The neo-liberal story
asserts an anti-social reality
that is presented as unknowable in its essence without a beginning and
without historical contradictions that must be resolved for society to
solve its problems and move forward. All policies and actions
surrounding the neo-liberal story must conform to a prescribed
resolution for which no alternative is possible. The process itself
precludes any conscious participation of individuals in acts of finding
out, discussion, the forming of an agenda or practical politics for a
pro-social alternative. Blocking the working class from participating
in practical politics to resolve economic, political
and social problems is an important aspect of neo-liberalism.
The neo-liberal method is widely used throughout the
world as an ideological and political tool to push the anti-social
offensive. For example, the finances of a state are described as
terrible and heavily indebted. In Europe, the U.S., Canada, Quebec or
Ontario the situation in the imperialist system of states is
described as similar or so the story goes. The only possible action
flowing from the neo-liberal story of debts and deficits is austerity,
attacks on social programs and concessions from the working class. Any
discussion of a pro-social alternative is dismissed as absurd because
only austerity and concessions can possibly
emerge from the story of debts, deficits and global competition.
Harper, Charest, McGuinty et al preach this neo-liberal
mantra of debts, deficits, global competition, anti-social austerity
and concessions as leading to the Holy Grail of economic renewal for
the monopoly capitalists. Any pro-social alternative
is banned from thinking and practical politics, as heretical and
contrary to the neo-liberal story, which is repeated ad nauseum
in the mass media.
The DBRS Neo-Liberal Story
DBRS introduces its study with a press release that
describes a dire situation facing defined-benefit pensions and predicts
their collapse. Following a description of its own creation, DBRS
asserts that defined-benefit pensions are doomed and that individual
must fend for themselves using individual, government or company
defined-contribution savings plans that will provide them undetermined
pension benefits in retirement.
Notice the use of emotive words in the DBRS press
release to embellish the story and make it appear unassailable:
"The continued low interest rate environment has
contributed to a ballooning pension funding deficit.... Many plans have
now entered the danger zone of funded status.... DBRS notes that 2011
saw an increasing portion of pension plans slide into this danger zone
of underfunding.... More than two-thirds of plans
reviewed this past year were underfunded by a significant margin....
Based on this pension environment, DBRS has revised its previously
optimistic outlook on pension funding.... DBRS expects that
defined-benefit plans will be slowly unwound and removed over the next
40 years.... We're seeing fewer companies
offering defined benefits to new employees.... The study notes a
trend of employers offering workers defined-contribution plans rather
than defined-benefit plans in the United States, which is reflective of
the trend in Canada and abroad as well."
The neo-liberal method does not require that a
description conform to reality or even less concern itself with how or
why the described "growing trend" came into being.
DBRS defines the "danger zone of underfunded status ...
as a funded status of less than 80%." However, the DBRS study quotes
the Office of the Superintendent of Financial Institutions, the primary
regulator of private pension plans under federal jurisdiction as
saying, "In 2011 the average funding ratio was
81% (versus 81.7% based on the DBRS sample universe)." "Average"
generally refers to a typical amount or level of something. The DBRS
average of 81.7% of its sample universe could hardly be considered as
"two-thirds of plans underfunded by a significant margin." But then,
neo-liberals never let even their
own facts spoil their story.
Continuing to undermine its own story, the DBRS study
says, "47% in the DBRS sample universe" of federal and provincial
defined-pension plans "are healthy" based on its own "criterion." Yet
contrary to its own finding of a "healthy 47%," the DBRS press release
insists, "more than two-thirds of plans reviewed
this past year were underfunded by a significant margin." The press
release was the basis for most mass media reports with only a rare
journalist bothering to investigate the actual study.
The content of several tables and comments in the study,
for example in the section "Overall Performance from 2002 to 2011,"
also contradicts the DBRS Chicken Little story for defined-benefit
pensions. The tables show how funding status can dramatically improve
with even a slight uptick in the economy.
Of the 451 plans examined, 374 in 2006 and 389 the following year
improved their funded status. From 2004 through 2007, employer
contributions decreased with some employers even taking out surpluses
because funding status had markedly improved. In 2007, plans
underfunded by more than 20 per cent fell to around
13 per cent of the total while those with a surplus grew to almost 40
With the onset of the economic crisis in 2008, the
assets of most plans fell causing a rise in underfunded status similar
to the crisis in 2001 but still nowhere near the assertion of DBRS in
its press release that two-thirds of plans are underfunded by more than
20 per cent. In its introduction to this section, the DBRS
study further contradicts its neo-liberal hysteria against
defined-benefit plans stating, "The following tables show the
volatility of funded status and how it is driven mainly by the economic
factors of each period." If the funded status of defined-benefit
pensions "is driven mainly by the economic factors of each period,"
how does eliminating them solve the problem of recurring economic
crises? Neo-liberals target social programs because they want to
transfer the collective wealth away from the working class and the most
vulnerable in society to owners of monopoly capital. Their anti-social
policies and practices aggravate the underlying
economic contradictions that cause crises. Cuts to social programs and
concessions extorted from the working class are not solutions!
The concern of the people and their social consciousness
should concentrate on finding out why economic crises are recurring
occurrences that cause hardship for all. This pro-social concern
includes conscious participation in practical politics and acts to
combat the recurring economic crises and find out their
root cause so that a new direction for the economy can be found and
implemented. Attacking social programs such as defined-benefit
pensions, which are needed by all and should be guaranteed in a modern
society, will not solve the country's economic problems but will only
make the situation worse for the people
and their socialized economy.
Defend the Defined-Benefit Pensions
Fight for Defined Retirement Benefits for All
The DBRS neo-liberal
story attacking defined-benefit pensions reinforces an anti-social
direction for the economy that is no solution at all and destructive
to the interests and rights of the working class. Modern society has
the productive capacity to support defined benefits for all at a
Canadian standard. The point for the working class is to organize and
engage in practical politics to transform the necessity for defined
pension benefits into reality.
The DBRS attacks on company and public defined-benefit
pensions drag society backwards. From a supposedly detached
perspective, DBRS describes what it sees as an inevitable shift away
from defined pension benefits towards individual workers saving for
their retirement resulting in pension benefits that are
unpredictable and which possibly will completely run out.
DBRS writes, "Employees Will Be Increasingly
Reliant on Their Personal Retirement Savings -- The
shift in trends away from defined-benefit plans and the inadequacy of
government social security benefits will force most employees to take
responsibility for their own personal retirement
The working class cannot accept this anti-social trend
as inevitable. The attacks on defined benefits are not a trend at all
but a well-organized and financed political and media offensive against
workers' rights. The Workers' Opposition is determined to defend the
defined-benefit pensions that exist and bring into
being a pro-social alternative of defined-benefit pensions for all. The
progressive trend of history is towards government guaranteed
defined-benefit pensions for all funded by a corporate pension tax on
all businesses according to the size of their gross income.
The Workers' Opposition is organizing its own practical
politics and media campaign to defend the existing corporate
defined-benefit pensions and not allow them to be undermined by
neo-liberal politics. These company defined-benefit plans are a
stepping stone towards universal government defined pension
benefits for all at Canadian standards.
Depriving Retirees of Their Right to a
Claim on Revenue Is the Main Reason for the Attacks on Defined-Benefit
Big business wants to eliminate its defined-benefit
pension funding contributions, which according to DBRS were $85 billion
in the U.S. and Canada during 2011.
The claim on company revenue to fund defined pension benefits is the
target of assault. The big monopolies want the revenue, presently
flowing into pensions, transferred into their general accounts to be
used as they see fit rather than claimed to support retired workers at
a modern standard. All the other chatter
of funding obligations, pension plan solvency, demographics and whether
companies should be in the "retirement business" is to divert attention
from the monopolies' anti-social offensive to deny revenue for pension
benefits and instead use it to pay the rich.
Defined-Benefit Pensions Are a Right in Modern Society
DBRS presents the claim on revenue to fund defined
pension benefits as a negative factor in the economy. The Workers'
Opposition disputes this assessment saying the aim of a modern economy
is to allow all its members to live
in dignity at a Canadian standard whether actively working, unable to
work due to injury, illness or some other reason or retired. The aim of
a modern economy cannot be to make certain individuals rich by
exploiting the working class and hope that wealth will trickle down to
others while charity sorts out social
problems and the general needs of society. Such an anti-social aim is
in contradiction with the socialized basis of a modern economy and the
reality that people have rights by virtue of being human.
Owners of monopoly capital are the first to admit that
their biggest priority is to defend and enlarge their personal wealth
and empires, and to build a wall between themselves and social problems
and the general interests of society. But this aim and priority to pay
the rich is in contradiction with those on the
other side of the wall who have rights by virtue of being human, which
includes the right to a cultured dignified retirement with defined
DBRS searches for reasons to attack defined-benefit
pensions and applauds their destruction. Prominent amongst its reasons
are the periodic economic crises that grip the capitalist economy and
the global inter-monopoly competition and empire-building within the
imperialist system of states. Instead of tackling
those problems head on to resolve them and move society forward in a
new direction, neo-liberals retreat into an irrational destructive
defence of the status quo. They declare crises and competitive global
empire-building as unavoidable for which no alternative exists. To save
their particular empires, class privilege
and authority, they attack social programs and the claims of the
working class including the right to defined pension benefits.
To camouflage the core reason for attacking
defined-benefit pensions, which is to stop retired workers' claims on
company revenue, DBRS has the gall to suggest that denying
defined-benefit pension plans for new hires is somehow in the interest
of the new generation of workers.
DBRS writes in the section, "Increased Strain on
Sponsors and Employees Alike.... This shift to
defined-contribution pension plans will also place less strain on the
future workforce, as they currently must help subsidize existing
defined-benefit pensioners should any shortfalls occur." For
DBRS, active and retired workers' claims on company revenue are somehow
a "strain" on the owners and workforce alike.
The wages of young and senior workers are legitimate
claims on company revenue. This revenue exists because it has been
generated by those same workers who stake a claim on what they have
produced. According to the capital-centred logic of DBRS, workers'
claims on revenue in the form of wages, benefits
and pensions put a "strain" on both themselves and the company. To
relieve the "strain," the neo-liberals demand concessions from the
working class contending that with the elimination of the "strain" of
workers' claims for wages, benefits and pensions the companies will be
able to survive the periodic economic
crises and engage fully in the global competition to build their
respective empires. For the working class, the strain on revenue from
the claims of owners of capital for higher and higher profits is
damaging to the economy and workers and contrary to the public interest.
The Workers' Opposition declares that within the
situation as it presents itself, equilibrium must be established based
on recognition of the rights of the working class. Working class
concessions are not solutions to the problems of economic crises,
competitive global empire-building or any other problem within
the socialized economy. Concessions create disequilibrium. A new
direction for the economy and equilibrium based on recognition of the
rights of the working class must be found and put into practice. This
new direction and equilibrium are not found in the words of DBRS and
its conciliation with the negation of
the right of all to defined pension benefits. The Workers' Opposition
dismisses the DBRS study with contempt.
DBRS Starts from an Anti-Social Thesis
Seeks Out Data
to Prove It
DBRS begins from the anti-social thesis that companies
defined-benefit pension plans and governments will continue to refuse
legislate and guarantee universal defined pension benefits at living
that workers acquired during their years of employment.
DBRS pushes its anti-social thesis by putting forth
and data creating an atmosphere of doubt and even panic around the
of defined-benefit pensions. To do this it uses jargon such as "total
"funded status," "total obligations annually," "widening gap between
assets and obligations," "drop in discount rates" etc. These concepts
on assumptions that can be manipulated to suggest a preconceived
surrounds this jargon with evocative words that further manoeuvre the
towards unwarranted conclusions.
For example, DBRS says employer contributions are "too
high" making up
"4% of total obligations annually." This information could be just as
written a different way: employer contributions are too low making up
4% of total obligations annually. Either way misrepresents the figures
leaves the reader no further ahead in grasping how the situation
and what has to be done to ensure retired workers do not end up
and finishing their lives without dignity.
Presenting assumptions and figures in a preconceived
context does not sort out the problems of a socialized economy
its people. This is similar to the global financial ratings agencies
governments throwing national and provincial deficits and debt at
screaming in panic for austerity, demanding cuts to social programs,
privatization, pay-the-rich schemes and working class concessions of
wages, benefits and pensions.
DBRS presents itself as authoritative and unquestionable
in economics. It
uses capital-centred terminology embossed with emotion and alarm to
its anti-social thesis that defined-benefit pensions are in crisis and
have to be
abandoned. From its study, look at one emotion packed explanation of
obligations that leaves readers confused and uneasy, and if not
convinced that defined-benefit pensions have indeed entered the "danger
and are no longer possible:
"(4) Pension Obligations -- Increased Largely Due to a
Interest Rates: Discount rates are a key variable in changes in pension
obligations. They are calculated by taking the risk-free rate (based
government bonds) and adding a risk premium (90 basis points). As a
of the decline in interest rates, discount rates dropped by
basis points over the past four years and pension obligations hit an
high in 2011, contributing significantly to the current pension
"Widening Gap between Pension Assets and Obligations:
past year, due to low
discount rates.... This combination of higher obligations and weaker
growth has created a funding gap that rivals 2008 levels."
Wow, the sky really is falling Chicken Little! Low
interest rates are
causing the sky and discount rates to fall, as the risk-free rate plus
premium have collapsed resulting in pension obligations hitting an
high, widening the gap between weaker pension assets and obligations
generating a funding gap that has plunged underfunded pension plans
danger zone -- My heart is pounding Chicken Little; all I can do is
The upshot behind all this hysteria is that the big
monopolies do not want
revenue going into pension funds and they do not want revenue directed
towards paying defined pension benefits. They want to eliminate a
program that came into being because workers recognized a need, and
organized and fought to meet that need with defined-benefit pensions.
governments at all levels instituted universal defined pension benefits
at a Canadian standard, individual companies would be relieved of the
chore of managing pension plans. Defined pension benefits would become
universal social program similar to universal health care funded
general public revenue. To sustain the universal pension program,
would have to supply a pro-rated amount of revenue based on their gross
income not on the number of retirees from their particular company. But
monopolies are dead set against any use of company revenue for
general social programs and use their political power and monopoly
thwart any such pro-social development. The working class has to
practical politics to deprive big business of its power to deprive the
both particular and general social programs.
Aggregate Data for Defined-Benefit Plans
The following aggregate figures for Canada and the U.S.
the DBRS study show assets of defined-benefit pension funds and their
liabilities from 2006 to 2011. The statistics also show benefits paid,
contributions, funded status, net asset growth and discount rates from
2011. The figures reveal problems but not a crisis requiring the
a very positive social program that could be developed into government
universal defined pension benefits for all. One should also remember
figures are aggregates while each defined-benefit plan has its own
particularities that have to be investigated.
U.S. and Canadian Defined-Benefit Pension Plans in USD
Millions (from DBRS study):
|Net Asset Growth
Assets fell in 2008 and subsequently increased back to
the 2006 level by
2011. Benefits paid in 2011 are up by just over $5 billion to $111.342
Liabilities fell from 2006 to 2008 and then began to grow. Since the
crisis, assets and liabilities seem to be going in opposite directions.
assets improve, the funded status does not and even worsens in 2011
a "widening gap." Why is this so? The objective figures of actual money
(assets, benefits paid and contributions) appear positive, especially
turmoil caused by the 2008 economic crisis. The subjective figures
actuarial assumptions (liabilities, funded status and discount rate)
conversely negative. Why that is and what the correlation between
negative figures may be, DBRS does not explain other than to place most
the blame on low interest rates. It would appear that an exaggeration
liabilities and poor funded status plays into the attack on
pensions and the anti-social thesis that they are "not possible or
DBRS says the following about liabilities: "These
liabilities may fluctuate
with pension benefits paid during the year and changes in underlying
assumptions such as mortality rates, investment returns and discount
which cause volatility in pension obligations."
Assets fell in 2008 yet liabilities fell as well. Assets
improved from 2009 to 2011, and benefits were stable yet liabilities
appears that the other "actuarial assumptions" outweigh that of the
and contributions when determining liabilities and funded status. In
appears a contradiction with the aggregate figures, DBRS writes,
economic times, a low interest rate environment would exponentially
obligations as assets typically plunge." Following the 2008 collapse,
economy continues to have low interest rates but total assets have
to reach the same level as 2006. However, based on actuarial
liabilities have grown significantly and the generalized funded status
No one should draw unwarranted conclusions from
presents. It appears that they are meant to bolster an anti-social
defined-benefit pensions must be destroyed. The Workers' Opposition
that anti-social thesis and asserts that universal defined pension
benefits for all
are the order of the day and well within the capacity of the modern
economy. To reach that goal all existing defined-benefit pension plans
be fully protected and guaranteed through government intervention if
and not allowed to flounder under any circumstance including company
bankruptcy protection intent on destroying or downgrading its own
defined-benefit plan. Public policy should be put into practice to
universal defined pension benefits for all.
Concessions Are Not Solutions!
Defined-Benefit Pensions Are a Right!
ISSUES | HOME
Read The Marxist-Leninist Daily