This article is about a group pension plan and a legally mandated way of calculating liabilities that isn't working in a particular case. It's a simple law change. It's not some crazy bureaucratic maze or malevolent government - it's actually a private pension administrator, and it is based on a strict way of calculating future liabilities for group plans being applied to individual members when they leave the group in a fairly dumb way.
The law in question came around for a good reason:
Section 75 came about as a result of a sweeping review of pension regulation in the wake of the Robert Maxwell scandal in the 1990s.
Following the media tycoon's death it emerged he had plundered millions from the Mirror Group pension scheme.
The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall.
It is just a poor match with this type of shared pension scheme (not British, so forgive problems matching this to other types of defined benefits plans I'm more familiar with). This seems to be a clear case to revise this Section 75 for these types of group plans/schemes.
There is no actual fiscal problem here, just a legal one. The biggest obstacle to amending the existing law, based on the article, is an inability to enact legislation because of distraction by Brexit.
> Section 75 came about as a result of a sweeping review of pension regulation in the wake of the Robert Maxwell scandal in the 1990s.
> It's not some crazy bureaucratic maze or malevolent government
hmm
Policy designed for big firms, and in reaction to a few bad billionaire's or hundred millionaire's actions, which then destroys or squeezing out the small companies is one of the most common complaints against regulations like this. It's how you end up with only mega-corps and no competition or upward mobility for the middle class, and everyone wondering why there's a wealth gap when your only option is to work at bigco.
This stuff always starts out with good intentions like "punishing the rich". And then some nobody middle-class plumber in Scotland is the one being forced to sell his house while Maxwell's family trust is still worth millions.
Meanwhile law changes are never a 'simple fix', these sorts of things stick around for decades.
Edit: note Robert Maxwell was the billionaire(?) father of Ghislaine Maxwell who was Epstein's second-in-command in the sex ring
Yes, financial regulation is hard. People are always trying to game it. Unfortunately there are really good reasons to avoid ex post facto laws. So you have the cat and mouse game where people find a loophole, exploit it, and it gets fixed. It gives the appearance of people "getting away with it". Overall the system works, and - almost by definition - you just hear about the exceptions. The solution isn't to give up.
> This stuff always starts out with good intentions like "punishing the rich"
No. This stuff starts out with good intentions like - "not leaving people who have retired, suddenly with no pension and having to live in poverty or rely on the state, rather than on the employer pension that they had promised would be there for them". It''s not there to punish the rich.
In this case, however, the formula being used to determine whether a pension scheme is in trouble seems the problem and it needs to be reviewed urgently.
I'd argue that it is a crazy bureaucratic maze, but we agree on the specifics of the change.
Shared liability was a fairly simple way for small employers to keep their workers taken care of even if specific businesses failed. Its existence, along with the existence of unincorporated business owners, was missed or ignored when Section 75 was put into place. And the oversight wasn't corrected in 2005 when the rules were revised.
More damningly, the rules were revised seemingly without consideration for the difficulty of back-filling forty years of contributions to an entirely new threshold. Section 75 came about because of outright theft, and was revised in response to employers promising pensions out of line with what they were actually investing, but it wasn't targeted towards those cases. Instead, it created a liability for employers who'd been adequately funding pension schemes for decades, based on a calculation they'd never planned to support. And if the pension funds don't play along, they incur fines which could actually make healthy funds insolvent!
So a change aimed at addressing theft from pensions has created a situation where either employers are bankrupted for offering pensions to employees, or healthy, honest pension funds become unable to pay full benefits. I won't allege malice, but it's fairly spectacular incompetence to write a law supporting pensions which actually endangers people's pensions.
I agree! Closing loopholes to prevent theft was good. Implementation was lacking. They should fix this and stop good people like the subject of this article from suffering.
> . It's not some crazy bureaucratic maze or malevolent government
It is. Because as one 71-year old individual, former plumber, one day the regulators come knocking on your door telling you you're 1.2m short. In this kind of situation, an individual with no political or instiutional connections is (perceivedly) powerless and overwhelmed:
- I can't pay my responsibilities.
- I can't change the law.
You can't really use that term to describe a situation that is well understood and is widely recognized to be a problem (not exactly a Kafka staple). It's simply awful law, which is bad enough.
You'd expect lawmakers to just fix it, although they tend to be preoccupied with other things in the UK right now.
It seems like the governments officials overseeing the scheme don't see anything wrong with Section 75:
> The Department for Work and Pensions spokesman said the rules were in place to ensure schemes were adequately funded.
> He said: "We have a duty to protect members in their retirement, ensure schemes are properly funded and work with those employers who remain in a multi-employer scheme.
It seems like a giant clusterf*ck was introduced in 2005.
1. It wasn't properly communicated to anyone
2. There was a loophole that allowed a company to exit the pension for £1
3. The remaining businesses to cover the share of the deficit for everyone who had exited the scheme.
4. Most of these businesses didn't learn of the deficit until 2016, a decade after the the new math went into effect.
If the pension didn't do their duty to warn businesses of the deficit in 2005, it should be on their heads to fund the deficit, and they should not be allowed to pull from the pension fund, they have to pull from their own money.
Had these businesses known 10 years ago, they could have been paying all along an increased pension rate for their employees.
>If the pension didn't do their duty to warn businesses of the deficit in 2005, it should be on their heads to fund the deficit
The irony is the Pension claimed they couldn't notice the employers at the time (which would have given the opportunity to buy out for 1 Euro) because they would have had to research the contact info for thousands of employers...yet the Pension seems to have no problem doing the research now and noticing these employers of their Million+ Euro liabilities.
> and they should not be allowed to pull from the pension fund, they have to pull from their own money.
What's the pension's own money here? Everything they manage should nominally be part of the fund owed to their retirees. Where do you propose they actually draw money from?
Sort of off-topic but for context, the “Department of Work and Pensions” (DWP, previously the “Department of Social Security” but renamed for ideological reasons) has been repeatedly caught making blatant lies in publicly released material in recent years, and are widely despised by anti-poverty and disability-rights activists. So do not take their statements at face value.
> The Plumbing and Mechanical Services (UK) Industry Pension Scheme was set up in 1975 with the aim of providing pension benefits for all employees of firms engaged in the Industry in the United Kingdom. The Scheme offered deferred benefits based on career average earnings.
I have luckily never been caught in one of these kakfa-esque bureaucratic traps before, but I don't know how people hold it together when they do get caught in it. It seems like there isn't any thought being put into possible edge cases for policy and here seems to be little recourse for people to get out of it. Everything about governments just feels like this wall of indifference, from interactions at the DMV to policy being created. Just thinking about it makes me a little crazy. It is so inhuman.
It's not specific to governments, any sufficiently large organisation behaves like this. Think of the people who've had Google accounts vanished without explanation. Or the RBS small business scandal: https://www.theguardian.com/business/2018/feb/12/confidentia...
At least with governments you get a representative.
With government orgs we get representatives who don't have any stake in improving these things.
I once had an incident where the receptionist at a DMV office messed up and didn't register me. I had patiently waited for 3 hours before noticing that people who lined up after me started getting called. So when I went up and asked if anything is wrong, the office manager looked something up on her screen and, upon seeing that I'm not registered, smiled and cracked a joke about it with another employee. She then told me I have to go back and take a seat and wait for my number to get called. At this point, I realized something went terribly wrong, and started literally begging to get expedited since I had already waited for more than three hours by then. The office manager's response was to scream at me, telling me that I'm causing disruption, and threatening to remove me with force.
I wonder if there's a way to actually improve the quality of these services?
> At least with governments you get a representative
...if you live in a republic. Bonus points if it's a democratic republic; then your representative will actually listen to you... if you can outbid the competition and get said representative elected via advertising money.
At least with a corporation, they can't impose arbitrary fines on you and lock you in a concrete box if you don't pay said fines... unless the government says they can.
> At least with governments you get a representative.
At least with corporations you get a choice, short of emigrating. Google is one of the most dominant corporations in the world, yet there are multiple alternatives to most of their services.
Indeed so; and not just government, any bureaucracy of sufficient size. To take a bit of a pop-sci angle, then as soon as you pass Dunbar's Number.
A video essayist I follow on youtube had a bit of a discussion about this, about being on the receiving end, after his car had been stolen, joy-ridden, and then set on fire. He was required to pay impound fees for the wreck, using proof of ownership that had been in the glove box. When he told this to the clerk at the impound lot, the response came, "Well, that's going to be a bit of a problem, isn't it?". And followed the red haze and the realization that these lots don't have bullet-proof glass in front of the counter to protect from robbery.
But I'd argue that it's borderline impossible to genuinely account for even the second tier of possible edge cases, even in the best of faith; law is too complex, and world changes at different rates in different places in too many ways to make that kind of considered extrapolation anything but speculative in the best case, and hopeful, well-intentioned gambling in the worst. Incidentally, this is a typical argument against regulation, though I'm not sure I agree with that, either...
I agree that it is probably impossible to account for a lot of edge cases, but then that means there should be more generalized methods for recourse when people feel that the law hasn't accounted for their situation. It sounds like the courts in this situation were just deferring to existing law rather than realizing there is an issue with it and addressing it.
This reminds me a lot of my most recent divorce negotiations, and indeed, I don't understand how so many people deal so well with these catastrophes.
Take it from me: Don't get overly attached to money, things, or really even people. Think of it all more as a ride that you get to enjoy for a while, and then you get off.
If you're killing yourself at your job with the thought that you'll someday retire happily or otherwise get to start a happier phase of life (or even just be thanked for your hard work), disabuse yourself of that notion. The money you're piling up can be taken from you in a flash, or become worthless to you due to more overwhelming developments.
I saw a homeless man the other day with two dogs. The dogs were obviously happy, and had no concern that they were poor and might have had a much richer life. They had their health, weren't starving, and there were interesting things to do that day. I strive to live like those dogs.
The Greek and Roman philosophers had these concerns solved ages ago with the Stoics and others. Happiness comes from within, whatever situation we might find ourselves in.
A lot of these problems seem to stem from people unwilling (not unable, unwilling) to exercise judgement, and apply the rules in an ever-so-slightly flexible fashion.
With the right attitude, a lot is possible, but as you said there is often this "wall of indifference". I think a big reason for this is that it can feel good to exercise power over other people by saying "no". This is doubly the case if you live in a society where everyone is always doing this to everyone else: you feel "small" and pushed around, so when you actually get the chance to push others around you'll instinctively grab it.
What I find the most amazing, is that you do not get more desperate vengeance cases. I mean ; you worked your whole life, you tried to do the right thing, you basically have nothing to lose and yet you do not go out and hurt the people that screwed up your life out of nowhere. That always gives me new confidence in humanity as it feels like that could so easily happen, every time when someone (or a loved one) is screwed over by something they or you cannot, legally, get justice for.
Not only governments; big companies that just 'do things' because, like you say, no-one seems to have given any consideration to the edge cases. When you put that to them (Google, MS etc), the answer is always (possibly with some rancid dress-up) 'we cannot account for every case; that would not be commercial'. Governments probably have the same reasons but they cannot say that out loud (usually) because re-election (of their political party).
A friend changed her last name two months ago; she got a letter that it succeeded and it would take 3-6 months to take effect. So today, while she was traveling, she got a letter from the gov that it was finished and that all her papers are per direct expired. Passport, ID, driver's license etc. This was an edge case in that: 0) it rarely happens (first name happens more often, last name is rare here) 1) it usually takes much longer 2) they usually send a letter with enough room to request new papers 3) most people don't travel much.
But the end result was; those docs expired and 'we are sorry not warning you on time, but sorry we cannot do anything, you have to come to NL to request new ones'. No valid documents to travel, so how does that work? Anyway; not quite the same thing as the article, but it happens weekly at least. No-one thinks things through, ever.
>It seems like there isn't any thought being put into possible edge cases for policy and here seems to be little recourse for people to get out of it
There's often someone who wants to fix the bug when it comes up but unless it's mission critical over time it drops in priority and fades into the nothingness of the backlog and in the rare instances when the bug comes up it still keeps getting dealt with manually.
This isn't unique to government but the fact that government has a monopoly on many of the services it provides and the onus is often on the citizen to take action to avoid some sort of default action against them certainly does not help them find motivation to fix the edge cases quickly.
The whole pension situation is going to blow up completely. As a GenX, I fully expect to have to work well into my 70's and then finally get a state pension (if I get one at all) completely inadequate to support me.
Boomers are the major political force, and so pensions are good now. But as soon as enough of them die off, GenY/Millenials will be the dominant demographic and all the remaining pension funds will get ransacked for benefits to the young.
A bit like Student Loans all over again (Boomers got their education for free, GenX had to pay, Millenials got shafted), except it'll just be GenX getting the finger this time.
I upvoted you because I tend to agree. However, I came to a different conclusion as to why benefits like pensions and social security will be underfunded for Gen X.
It basically all comes down to tax policy. Boomers voted to cut taxes (especially on the wealthy) to roughly half what they should be, and ran up the national debt to match the GDP when there was no war or other crisis to justify it.
The founding fathers warned against that, because if one generation offloads its debt to the next, then it effectively enslaves the next against its will (deprives it of property, and taxes it without representation, among other things). This is self-evidently unsustainable, because any generation could do it at any time.
This concept can be trivially extended to all underfunded benefits. Maybe a shark raided retirement funds through legal smoke and mirrors but never got arrested. Maybe bankruptcy was abused multiple times to avoid paying workers, and that person not only didn't go to jail, but ended up a billionaire and president of the United States. You can see that this philosophy runs deep throughout our culture.
So I don't buy that pensions are underfunded because a company collapsed due to loss of market or whatever. It's more likely that the funds were raided the same way that congress has been writing IOUs for social security since the 80s. Somebody stole that money.
So I'd vote to pay down the national debt by raiding wealth created between 1980 and today. A high inheritance tax would do that. So would raising unearned income taxes (like capital gains) far above earned income tax.
Yes, these would slow the economy. But we're all cheating right now, living off the backs of future generations. Growth won't matter if gen X and millennials wake up and decide to throw a jubilee and cancel the national debt (my pie in the sky preference).
Don't have to cancel it... All that debt is in US dollars. Just print so much money that you have 20% inflation per year for four or five years. Problem will be fixed. It's a scam you can only pull off once (after that the dollar isn't going to be the world reserve currency anymore), but it's a scam you can pull off once.
> The founding fathers warned against that, because if one generation offloads its debt to the next, then it effectively enslaves the next against its will (deprives it of property, and taxes it without representation, among other things).
Enslaved to whom? You can’t send your labour into the past. A huge national debt ‘run up’ by a previous generation just means that the next generation becomes more unequal, as the majority are taxed to fund interest payments to the heirs of the original bondholders. I don’t really see how this is more unjust than the existence of any other law or policy established before I was born, which I had no say in. If the solution is to appropriate the wealth of bondholders, the next generation will be equally able to implement that policy.
This kind of over-generalization based on "generations" is nonsense. I'm technically "a Gen X" (although I haven't developed a bitter "just so" worldview based on having been shafted by the different age group with all the baddies in it) and have got a personal pension that I've paid into.
my parents got a free education (with a living allowance), mortgage tax relief on their mortgage payments, a pension based on their final salary, and a state pension that is growing about twice as fast as unemployment benefits.
The free education stopped as the last boomer quit university. The mortgage relief stopped as the last boomer paid off their mortgage. The pension was roughly equal to unemployment benefits until the first boomers retired. It's not coincidence.
Its a bit more complex but you can see how OP has a point if you look at countries with a state mandated pension system, Germany for example. While I dont think blame will get us anywhere, the idea that the last generation leaves us a pension system that might have some similarities to a snowball system is hard to argue with, especially if there is no political will to fix this. The last big debate ended with the government making no changes and declaring that pensions is safe till at least 2030. Which is not really that big of a trust boost for someone who is planing to retire a lot later. Not even mentioning for how many its clear that they will get a pension on or under the level of welfare. So despite the knowledge, that me getting a pension from the pension system is lets say unsure, i will keep paying the the pension of the last generation who will be entering their retirement in the knowledge that the system is broken and unsustainable.
We dont have a generation conflict yet, but if the government keeps ignoring the issue in the hope of it becoming the next generations problem there will be one. Looking at the debate on climate change, where the question what the current generation 50+ is leaving us behind, I hope we will be talking about pensions as well.
It often is and can be, but since when it comes to "pensions" we are specifically referring to periods of time and demographics, it can be relevant. Although when the bad stuff will happen may or may not align with any particular definition of the generations in question.
It's interesting that "Millenials got shafted". When I went to college in the 1980's, it was much cheaper than now - I admit that. I lived in a very small dorm room with 4 guys in it and one bathroom on a whole floor of dorm rooms. I worked part time during the school year and full time during the summer to pay for it. I had no car, no TV and only ate food the school provided via my meal plan.
I now work for a large public university. Let's compare. Most students don't have jobs at all. Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person). These students visit the town restaurants quite often and we have bars that are overflowing on Thursday, Friday and Saturday nights with college students. When I've asked how this happens, I'm told that college loans let you pay for room and board so they happily get the most expensive housing possible because it's "free". Almost all students have cars and lots of them have a "parking ticket budget" so have no problems parking illegally and paying for it. It's also "free" because of their student loan.
Citation needed. 40% of undergrads work at least 30 hours/week[1] so I'm willing to wager that the majority of them have some sort of job.
> Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person)
Where are you living that rents are so high but property is so cheap? Or did you buy a long time ago? And again do you have a citation for "most" (which is defined as > 50%)? The data says most undergrads still live in college-owned housing.[2]
> When I've asked how this happens, I'm told that college loans let you pay for room and board so they happily get the most expensive housing possible because it's "free". Almost all students have cars and lots of them have a "parking ticket budget" so have no problems parking illegally and paying for it. It's also "free" because of their student loan.
There's a term for these people: "financially illiterate". They have always existed and will continue to exist. Do you have any evidence that there are more of them now?
Anecdotes are not data. Your personal observations don't invalidate reality.
You can stop thinking about all the auxiliary stuff you mentioned, and just compare, for example, the ratio of tuition : minimum wage from your college education and a contemporary one.
My father went to college in the 80's and he owned a tv, a car, and went to bars occasionally. He paid for that by working. A large portion of my friends paid for similar lifestyle by working in the mid 2000's.
You might be comparing your especially frugal college experience to a different one.
But tuition has been the college expense that has sky rocketed and made it difficult/impossible to pay your own way though college. My father paid around ~2,000 for tuition, my little sister would pay close to ~11,000 to go the same college which comes close to doubling the total cost of attending college.
I am a recent large public university grad. In my freshman year I lived in a very small dorm room with 4 folks in it and one bathroom on the whole floor. This was mandatory to attend the university. Everyone I knew worked part time during the school year and either worked full time to pursued REU (Research experience for undergrad) or others. Since my campus is only really manageable via driving, most people owned really, really cheap cars. I'm talking at least one person in my friend group getting in a car accident every winter because no one could afford winter tires type stuff. No one owned a TV and several couldn't afford the meal plan so they went without food and had to beg friends with meal plans to get them some food that day.
All of them are heavily in debt. Several dropped out because they couldn't afford it anymore, even with loans.
>I lived in a very small dorm room with 4 guys in it and one bathroom on a whole floor of dorm rooms.
This pretty much still exists at many unis. Dorm housing was absurdly overpriced, which is why many schools required it. Unless you had a good reason, the dorms were a suckers bet.
> I worked part time during the school year and full time during the summer to pay for it.
This is very common
> I had no car, no TV and only ate food the school provided via my meal plan.
How are you supposed to hold down a job without a car in this day and age? People didn't use the meal plan because it was a terrible value. Going to a restaurant was cheaper.
> Most students don't have jobs at all.
According to you. Have you looked at data then vs. now? Also, you can barely even pull in enough to make rent, so what's the point? It doesn't make a dent.
> Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person).
WTF are you talking about? Maybe at your university. I lived in a death trap @$180/month with a sketchy landlord I almost had to fight once. I'd hardly met anyone that lived somewhere nice. Maybe one or two, that would concede it was a nice thing, and a bit of a splurge, but they weren't paying that much anyway.
Your whole comment reads like someone that thinks people on welfare are living high on the hog and eating lobster.
EDIT: Added some stuff about how terrible a value college room and board is.
I'm sorry I don't believe you. My experience (as of 6 years ago) had been that I see students having part time jobs which aren't enough to cover much of anything other than food, partially rent, and occasional going out.
There were of course wealthy students who did all the things you talked about: going out, trips, expensive trips etc. but by no means were they the majority.
You see a couple of rich trust fund kids enjoying dad-given amenities and ignore all the poorer students not doing any of the things that you listed. I shared an attic with someone and slept on the floor because there was no room for a bed. And I went to a rich private school.
Also how many unis are there in the US? You work for all of them and know what "most" students live like?
Most importantly, even if what you said is true, what's an extra $5k a year to eat out and drink on top of your $150k tuition loans? The screwing has already been done.
I worked full time during summers (making over x4 minimum wage), TA'd during three semesters, went to a CC for the first two years, a state school for the second half. I lived with roommates for $500/mo for a year then with my parents for a the rest. At the end I still came out with $15k in dept.
That's getting shafted. For me it's fine because I had a career easily lined up. I don't see how the average person isn't getting hosed now though.
the vast debts incurred by the US education system are a new thing for this generation.
But I was mostly speaking of my experience in the UK, where the boomers paid no tuition fees and got a grant to cover living expenses. GenX generally paid no or little fees. Millenials are being saddled with more and more cost.
I have a cousin that used took the max for his college loans and then whatever he had left after tuition he used for trips to Japan, Europe, etc every summer and lots of fancy restaurants and clothes. College loans are insane right now.
I've never heard this before. Got a link that explains it? All I've heard from the few boomers I've talked to is that they generally worked during school and had some loans as well.
“Free” is only slightly hyperbolic. My mother went to the University of Washington for her undergraduate studies in the 50s/60s and paid $25/credit for classes. She covered that, easily, by working part-time. No loans.
This is what happened in the UK, tuition was free until fees were introduced at the tail end of GenX (quickly abolished in Scotland, more or less). I don’t think it was ever “free” in the US but until recently (GenX again?) it could be covered by a summer job in many cases. Obviously now it is absolutely bonkers in the US, and as it stands the more elite universities in England, Wales and NI are rapidly headed in that direction.
They didn’t get their education for free but compared to what people pay now it might as well be free. When boomers say they worked to pay for their education, they mean they took summer jobs washing dishes or waiting tables.
Try to do that today and you’d be washing dishes for the rest of your life and never pay off the student loans.
I'm at the tail end of the boomer generation (although I prefer to think of myself as men-x). When I left school only about 7% of my cohort went to university. Most of us didn't get a free university education, we didn't get any university education.
My parents, and their parents, and all their university peers, got grants to cover all living expenses, and paid absolutely no tuition fees. That's more than free - they were basically paid a wage to be there! None of them worked as far as I know - it was seen as full-time education.
An exercise for those who wonder: look at historical tuition + fees costs and the minimum wage at that time. As I recall, a summer of 40 hours per week at minimum would more than cover tuition at the University of Virginia in 1970.
So, no, the education wasn't free. But it was a lot more affordable.
It'd be the case for anyone in the UK where fees for education are relatively new. I'm making an assumption about the poster though. I paid a tiny amount in 1999 in the UK, but fees increased significantly since then. Your response is how I understand it to have been here in the US, but I suspect that the rate of inflation in the education market is much higher now than what "boomers" had to deal with. That doesn't change that they had to work during school or take on loans, but it did change their long-term outlook.
Another boomer here. I worked half-time throughout my undergrad and grad years, and full-time during the summer. Even then, I don't think I reached net worth zero until my late 30s or so. (This is with a solid tech degree.)
Well, I went to university in the UK in the 1980s and my education there for 4 years was completely free: fees were paid and I got a fairly decent grant.
I did work during the summer but focused on academic work (and other things...) outside of that.
If not free, a fraction of what we pay now. I think it used to cost a few thousand for a degree, not the hundreds of thousands that some people have for a philosophy degree.
> Plumbing Pensions scheme, one of the few schemes in the UK to be multi-employer, meaning it could be accessed by different, unconnected, employers and their employees... because it was a "last man standing scheme", those still in it had to pick up the liabilities of those who had already left - even though they had no connection with those businesses.
> The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall... Since 2005 far more stringent rules have been in force - and, by this new yardstick, Plumbing Pensions was deemed to be under-funded.
So pension systems were set up with an element of shared liability. That's a bit of a risk for employers, but also insurance for pensioners if their individual small employers failed. The worst case was that the scheme as a whole collapsed if many members dropped out.
Then the government applied a minimum funding requirement to payment structures which had been running for years without planning for that value. Then, it converted shared risk from an insurance model to a legal obligation, which could apply to individuals if their businesses were small enough. Then, it raised the minimum on plans which had been running for 40+ years, and couldn't possibly be backfilled.
It's hard to overstate just how badly Menzies was treated by these regulations. His pension enrollment was not only moral but financially responsible - it only became a problem when the terms he'd agreed to were repeatedly, retroactively altered. Nor should he be blamed for being slow to react to the changes - the last-man-standing scheme meant someone was getting stuck with that bill. Large, incorporated companies, by contrast, could be bankrupted but would at least face no personal debts.
Meanwhile, what about the Mirror Group, which motivated of these changes? Well, Robert Maxwell died before seeing any liability for his theft. His sons and other company directors were acquitted of all charges. And the government bailed out 50% of the uncovered pensions.
It's one small case of the usual dynamic, I suppose: some large businesses and multimillionaires behaved badly, so they faced no significant consequences , but a bunch of unrelated people who'd behaved just fine had their lives upended by a clumsy response.
The moral of the story is that governments and businesses should just abolish all pension, superannuation, 401K plans, etc... and let people manage their own retirement.
Big centralized retirement funds are scams and they always will be. Wherever there is a giant pile of other people's money managed by a bunch of bureaucrats, some suits will come along and find a way to profit from that pile of money in the most wasteful way possible.
Now all these retirement funds invest straight into low-yielding corporate stocks; so the money essentially ends up going into the pockets of corporate executives. And the worst part is that the government makes this compulsory.
I know superannuation is a scam but I'm forced to pay it anyway and I can't take the money out until I'm 65... I wouldn't be surprised if by that time, the retirement fund stock bubble will probably have popped and my retirement account will be worth $0... And all the fund managers and corporate executives will be rich.
It seems likely that US social security is linked with this: "Elderly poverty in the U.S. decreased dramatically during the twentieth century. Between 1960 and 1995, the official poverty rate of those aged 65 and above fell from 35 percent to 10 percent, and research has documented similarly steep declines dating back to at least 1939." [0]
At the same time as we have seen decreases in income, wealth and home ownership for younger cohorts when measured at the same age. Its just a transfer of wealth from young to old.
Elderly poverty was once a massive a tragic problem that both impacted the elderly as their ability to work waned, the families of the elderly who attempted to provide care, and the employment market as elderly employees tried to hang on as long as possible.
The conservative and libertarian trains of thought value individual agency above public welfare, which is a convenient point of view for people with the means to sustain themselves.
Another lesson is to only take any obligations on your business if you're running an LLC.
The plumber boss in question ran unincorporated, so his business's debts are his personal debt. Were he running an LLC, the debt would be on the company only.
LLC (and LP)’s are great, when there is any outside capital including debt:
all the profits go to you
Yours and other people’s money that you used to pay for things becomes a tax deductions for you
the worst thing that will happen is that the world’s most prestigious reporters will report that you “lost” a billion dollars and nobody will be the wiser that your personal balance sheet contains free and clear money and assets
>>> The moral of the story is that governments and businesses should just abolish all pension, superannuation, 401K plans, etc... and let people manage their own retirement.
That is definitely not the moral of the story.
Aside from that, what exactly do you think a 401k is, if not a vehicle for people to manage their own retirement? The only government involvement in a 401k is non-involvement in the form of allowing you to contribute pre-tax money. And the broker won't be involved either if you're smart and elect to invest in indexes, rather than mutual funds (which can have high fees).
I'm with you on 401k. I think the parent was more about pension plans where they are tied to an employer and the employee does not have much say in their retirement. A 401k can be rolled into an individual retirement account, allowing an individual to manage their own retirement money and allows portability between jobs. Pensions are often 'all or nothing'.
Workers do not have control over the fund choices they have in their 401k. Often, low cost index funds aren’t available. This can be fixed by working with HR and the 401k manager but it’s often an uphill battle and isn’t guaranteed to work.
Despite all that I agree that GP’s comment to abolish 401ks is throwing the baby out with the bath water.
And how is the little guy who is not a financial wizard supposed to manage their retirement funds? A lot of people will be easy prey for banks and financial advisors.
I hate this response. It comes up for everything. Someone always says we need government to be there for people who can't make good decisions. Where do we draw the line? A certain percentage of people will be too incompetent to function in a free society.
People are bad at managing retirement money. It is better to have a mandatory distributive model like in Germany. That way retirement grows with the economy, everyone has a retirement and nobody can just misappropiate the money.
This is exactly why everyone needs to know about jury nullification, at least in the US where it is allowed, so that if and when such cases come in a court the juries can help make common sense judgements rather than the ones mandated by narrow interpretation of the applicable laws.
That's just interpreted as "not guilty". I still don't understand why it is so hard for people to understand this.
The jury are just asked "are they guilty?" and if they don't give an answer it is, by simple virtue, not a guilty verdict. Voila, verdict of "not guilty."
UK law has precedence for defendants who did do the deed being given a not guilty verdict by the jury already. We even gave it the name "perverse verdict." The wiki page on jury nullification has details.
Juries are given specific instructions which includes something to the effect of "it is your duty to determine if the defendent violated the law, regardless of if you agree with the law". The possibility of jury nullification is not included in those instructions.
Before being selected for a jury, jururs are asked (under penalty of perjury) if they can apply the law regardless of there personal feelings about it. Anyone who seriously considers nullification would be lying if they said yes, and would likely be excluded for saying no.
At least in the US, all jury nullification is, is the fact that the jury's decision making is above review. It is not so much that jury nullification is legal, it is that any ban on nullification is unenforcable. The courts therefore do whatever they can to avoid nullification.
The National Institute of Economic and Social Research, a UK think-tank, produced an amusing (by pensions standards) video explaining the recent shifts in pension schemes, especially for government workers like teachers and nurses, and how some groups benefit while many lose.
Unfortunately pensions are an intrinsically boring topic. I recently met a professor of economics who lamented the £23bn deficit in the UK University pension scheme but admitted he was unable to get even his fellow affected economics academics to care.
For the guy who said his family business is worthless. Why not create a new business in sons name and sell all assets to the new company including the name. Put the first in bankrupcy?
If that helps out at all, it's a fraudulent transfer that would get reversed by the bankruptcy court. The business's creditors are entitled to up to 100% of the value of the assets that the business owns, you can't just sell them off before declaring bankruptcy.
That applies to hard assets, like a truck, inventory of hardware, power tools, etc. The real value in a business such as this is in the local brand recognition (usually applied to the name of the proprietor), a reputation for honesty and good service, and a list of customers with their contact information. So in that sense, a father probably could reasonably transfer or transition ownership to his son, it would just have to be done in a multi-step, gradual manner.
Readit News
The law in question came around for a good reason:
Section 75 came about as a result of a sweeping review of pension regulation in the wake of the Robert Maxwell scandal in the 1990s.
Following the media tycoon's death it emerged he had plundered millions from the Mirror Group pension scheme.
The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall.
It is just a poor match with this type of shared pension scheme (not British, so forgive problems matching this to other types of defined benefits plans I'm more familiar with). This seems to be a clear case to revise this Section 75 for these types of group plans/schemes.
There is no actual fiscal problem here, just a legal one. The biggest obstacle to amending the existing law, based on the article, is an inability to enact legislation because of distraction by Brexit.
> It's not some crazy bureaucratic maze or malevolent government
hmm
Policy designed for big firms, and in reaction to a few bad billionaire's or hundred millionaire's actions, which then destroys or squeezing out the small companies is one of the most common complaints against regulations like this. It's how you end up with only mega-corps and no competition or upward mobility for the middle class, and everyone wondering why there's a wealth gap when your only option is to work at bigco.
This stuff always starts out with good intentions like "punishing the rich". And then some nobody middle-class plumber in Scotland is the one being forced to sell his house while Maxwell's family trust is still worth millions.
Meanwhile law changes are never a 'simple fix', these sorts of things stick around for decades.
Edit: note Robert Maxwell was the billionaire(?) father of Ghislaine Maxwell who was Epstein's second-in-command in the sex ring
No. This stuff starts out with good intentions like - "not leaving people who have retired, suddenly with no pension and having to live in poverty or rely on the state, rather than on the employer pension that they had promised would be there for them". It''s not there to punish the rich.
In this case, however, the formula being used to determine whether a pension scheme is in trouble seems the problem and it needs to be reviewed urgently.
Dead Comment
Shared liability was a fairly simple way for small employers to keep their workers taken care of even if specific businesses failed. Its existence, along with the existence of unincorporated business owners, was missed or ignored when Section 75 was put into place. And the oversight wasn't corrected in 2005 when the rules were revised.
More damningly, the rules were revised seemingly without consideration for the difficulty of back-filling forty years of contributions to an entirely new threshold. Section 75 came about because of outright theft, and was revised in response to employers promising pensions out of line with what they were actually investing, but it wasn't targeted towards those cases. Instead, it created a liability for employers who'd been adequately funding pension schemes for decades, based on a calculation they'd never planned to support. And if the pension funds don't play along, they incur fines which could actually make healthy funds insolvent!
So a change aimed at addressing theft from pensions has created a situation where either employers are bankrupted for offering pensions to employees, or healthy, honest pension funds become unable to pay full benefits. I won't allege malice, but it's fairly spectacular incompetence to write a law supporting pensions which actually endangers people's pensions.
It is. Because as one 71-year old individual, former plumber, one day the regulators come knocking on your door telling you you're 1.2m short. In this kind of situation, an individual with no political or instiutional connections is (perceivedly) powerless and overwhelmed:
- I can't pay my responsibilities. - I can't change the law.
That's kafkaesque.
You can't really use that term to describe a situation that is well understood and is widely recognized to be a problem (not exactly a Kafka staple). It's simply awful law, which is bad enough.
You'd expect lawmakers to just fix it, although they tend to be preoccupied with other things in the UK right now.
> The Department for Work and Pensions spokesman said the rules were in place to ensure schemes were adequately funded.
> He said: "We have a duty to protect members in their retirement, ensure schemes are properly funded and work with those employers who remain in a multi-employer scheme.
It seems like a giant clusterf*ck was introduced in 2005.
1. It wasn't properly communicated to anyone
2. There was a loophole that allowed a company to exit the pension for £1
3. The remaining businesses to cover the share of the deficit for everyone who had exited the scheme.
4. Most of these businesses didn't learn of the deficit until 2016, a decade after the the new math went into effect.
If the pension didn't do their duty to warn businesses of the deficit in 2005, it should be on their heads to fund the deficit, and they should not be allowed to pull from the pension fund, they have to pull from their own money.
Had these businesses known 10 years ago, they could have been paying all along an increased pension rate for their employees.
The irony is the Pension claimed they couldn't notice the employers at the time (which would have given the opportunity to buy out for 1 Euro) because they would have had to research the contact info for thousands of employers...yet the Pension seems to have no problem doing the research now and noticing these employers of their Million+ Euro liabilities.
What's the pension's own money here? Everything they manage should nominally be part of the fund owed to their retirees. Where do you propose they actually draw money from?
Otherwise, this absolutely makes no sense.
> The Plumbing and Mechanical Services (UK) Industry Pension Scheme was set up in 1975 with the aim of providing pension benefits for all employees of firms engaged in the Industry in the United Kingdom. The Scheme offered deferred benefits based on career average earnings.
https://www.plumbingpensions.co.uk/about-us/about-us/
At least with governments you get a representative.
I once had an incident where the receptionist at a DMV office messed up and didn't register me. I had patiently waited for 3 hours before noticing that people who lined up after me started getting called. So when I went up and asked if anything is wrong, the office manager looked something up on her screen and, upon seeing that I'm not registered, smiled and cracked a joke about it with another employee. She then told me I have to go back and take a seat and wait for my number to get called. At this point, I realized something went terribly wrong, and started literally begging to get expedited since I had already waited for more than three hours by then. The office manager's response was to scream at me, telling me that I'm causing disruption, and threatening to remove me with force.
I wonder if there's a way to actually improve the quality of these services?
...if you live in a republic. Bonus points if it's a democratic republic; then your representative will actually listen to you... if you can outbid the competition and get said representative elected via advertising money.
At least with a corporation, they can't impose arbitrary fines on you and lock you in a concrete box if you don't pay said fines... unless the government says they can.
At least with corporations you get a choice, short of emigrating. Google is one of the most dominant corporations in the world, yet there are multiple alternatives to most of their services.
A video essayist I follow on youtube had a bit of a discussion about this, about being on the receiving end, after his car had been stolen, joy-ridden, and then set on fire. He was required to pay impound fees for the wreck, using proof of ownership that had been in the glove box. When he told this to the clerk at the impound lot, the response came, "Well, that's going to be a bit of a problem, isn't it?". And followed the red haze and the realization that these lots don't have bullet-proof glass in front of the counter to protect from robbery.
But I'd argue that it's borderline impossible to genuinely account for even the second tier of possible edge cases, even in the best of faith; law is too complex, and world changes at different rates in different places in too many ways to make that kind of considered extrapolation anything but speculative in the best case, and hopeful, well-intentioned gambling in the worst. Incidentally, this is a typical argument against regulation, though I'm not sure I agree with that, either...
Take it from me: Don't get overly attached to money, things, or really even people. Think of it all more as a ride that you get to enjoy for a while, and then you get off.
If you're killing yourself at your job with the thought that you'll someday retire happily or otherwise get to start a happier phase of life (or even just be thanked for your hard work), disabuse yourself of that notion. The money you're piling up can be taken from you in a flash, or become worthless to you due to more overwhelming developments.
I saw a homeless man the other day with two dogs. The dogs were obviously happy, and had no concern that they were poor and might have had a much richer life. They had their health, weren't starving, and there were interesting things to do that day. I strive to live like those dogs.
https://en.wikipedia.org/wiki/Marvin_Heemeyer
With the right attitude, a lot is possible, but as you said there is often this "wall of indifference". I think a big reason for this is that it can feel good to exercise power over other people by saying "no". This is doubly the case if you live in a society where everyone is always doing this to everyone else: you feel "small" and pushed around, so when you actually get the chance to push others around you'll instinctively grab it.
Not only governments; big companies that just 'do things' because, like you say, no-one seems to have given any consideration to the edge cases. When you put that to them (Google, MS etc), the answer is always (possibly with some rancid dress-up) 'we cannot account for every case; that would not be commercial'. Governments probably have the same reasons but they cannot say that out loud (usually) because re-election (of their political party).
A friend changed her last name two months ago; she got a letter that it succeeded and it would take 3-6 months to take effect. So today, while she was traveling, she got a letter from the gov that it was finished and that all her papers are per direct expired. Passport, ID, driver's license etc. This was an edge case in that: 0) it rarely happens (first name happens more often, last name is rare here) 1) it usually takes much longer 2) they usually send a letter with enough room to request new papers 3) most people don't travel much.
But the end result was; those docs expired and 'we are sorry not warning you on time, but sorry we cannot do anything, you have to come to NL to request new ones'. No valid documents to travel, so how does that work? Anyway; not quite the same thing as the article, but it happens weekly at least. No-one thinks things through, ever.
There's often someone who wants to fix the bug when it comes up but unless it's mission critical over time it drops in priority and fades into the nothingness of the backlog and in the rare instances when the bug comes up it still keeps getting dealt with manually.
This isn't unique to government but the fact that government has a monopoly on many of the services it provides and the onus is often on the citizen to take action to avoid some sort of default action against them certainly does not help them find motivation to fix the edge cases quickly.
To other HN readers, what recourse do the people in the article have?
This is a private pension plan which ran out of money. The only "government" involved is that the law about who holds the bag is unfair.
Boomers are the major political force, and so pensions are good now. But as soon as enough of them die off, GenY/Millenials will be the dominant demographic and all the remaining pension funds will get ransacked for benefits to the young.
A bit like Student Loans all over again (Boomers got their education for free, GenX had to pay, Millenials got shafted), except it'll just be GenX getting the finger this time.
It basically all comes down to tax policy. Boomers voted to cut taxes (especially on the wealthy) to roughly half what they should be, and ran up the national debt to match the GDP when there was no war or other crisis to justify it.
The founding fathers warned against that, because if one generation offloads its debt to the next, then it effectively enslaves the next against its will (deprives it of property, and taxes it without representation, among other things). This is self-evidently unsustainable, because any generation could do it at any time.
This concept can be trivially extended to all underfunded benefits. Maybe a shark raided retirement funds through legal smoke and mirrors but never got arrested. Maybe bankruptcy was abused multiple times to avoid paying workers, and that person not only didn't go to jail, but ended up a billionaire and president of the United States. You can see that this philosophy runs deep throughout our culture.
So I don't buy that pensions are underfunded because a company collapsed due to loss of market or whatever. It's more likely that the funds were raided the same way that congress has been writing IOUs for social security since the 80s. Somebody stole that money.
So I'd vote to pay down the national debt by raiding wealth created between 1980 and today. A high inheritance tax would do that. So would raising unearned income taxes (like capital gains) far above earned income tax.
Yes, these would slow the economy. But we're all cheating right now, living off the backs of future generations. Growth won't matter if gen X and millennials wake up and decide to throw a jubilee and cancel the national debt (my pie in the sky preference).
Enslaved to whom? You can’t send your labour into the past. A huge national debt ‘run up’ by a previous generation just means that the next generation becomes more unequal, as the majority are taxed to fund interest payments to the heirs of the original bondholders. I don’t really see how this is more unjust than the existence of any other law or policy established before I was born, which I had no say in. If the solution is to appropriate the wealth of bondholders, the next generation will be equally able to implement that policy.
The free education stopped as the last boomer quit university. The mortgage relief stopped as the last boomer paid off their mortgage. The pension was roughly equal to unemployment benefits until the first boomers retired. It's not coincidence.
We dont have a generation conflict yet, but if the government keeps ignoring the issue in the hope of it becoming the next generations problem there will be one. Looking at the debate on climate change, where the question what the current generation 50+ is leaving us behind, I hope we will be talking about pensions as well.
I now work for a large public university. Let's compare. Most students don't have jobs at all. Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person). These students visit the town restaurants quite often and we have bars that are overflowing on Thursday, Friday and Saturday nights with college students. When I've asked how this happens, I'm told that college loans let you pay for room and board so they happily get the most expensive housing possible because it's "free". Almost all students have cars and lots of them have a "parking ticket budget" so have no problems parking illegally and paying for it. It's also "free" because of their student loan.
Who is shafting whom?
Citation needed. 40% of undergrads work at least 30 hours/week[1] so I'm willing to wager that the majority of them have some sort of job.
> Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person)
Where are you living that rents are so high but property is so cheap? Or did you buy a long time ago? And again do you have a citation for "most" (which is defined as > 50%)? The data says most undergrads still live in college-owned housing.[2]
> When I've asked how this happens, I'm told that college loans let you pay for room and board so they happily get the most expensive housing possible because it's "free". Almost all students have cars and lots of them have a "parking ticket budget" so have no problems parking illegally and paying for it. It's also "free" because of their student loan.
There's a term for these people: "financially illiterate". They have always existed and will continue to exist. Do you have any evidence that there are more of them now?
Anecdotes are not data. Your personal observations don't invalidate reality.
1. https://cew.georgetown.edu/cew-reports/workinglearners/
2. https://www.usnews.com/best-colleges/rankings/most-on-campus
You might be comparing your especially frugal college experience to a different one.
But tuition has been the college expense that has sky rocketed and made it difficult/impossible to pay your own way though college. My father paid around ~2,000 for tuition, my little sister would pay close to ~11,000 to go the same college which comes close to doubling the total cost of attending college.
All of them are heavily in debt. Several dropped out because they couldn't afford it anymore, even with loans.
Whose anecdata is correct?
This pretty much still exists at many unis. Dorm housing was absurdly overpriced, which is why many schools required it. Unless you had a good reason, the dorms were a suckers bet.
> I worked part time during the school year and full time during the summer to pay for it.
This is very common
> I had no car, no TV and only ate food the school provided via my meal plan.
How are you supposed to hold down a job without a car in this day and age? People didn't use the meal plan because it was a terrible value. Going to a restaurant was cheaper.
> Most students don't have jobs at all.
According to you. Have you looked at data then vs. now? Also, you can barely even pull in enough to make rent, so what's the point? It doesn't make a dent.
> Most students live in high end apartments (lots of these apartments cost more than my mortgage payment for my 4 bedroom house - per person).
WTF are you talking about? Maybe at your university. I lived in a death trap @$180/month with a sketchy landlord I almost had to fight once. I'd hardly met anyone that lived somewhere nice. Maybe one or two, that would concede it was a nice thing, and a bit of a splurge, but they weren't paying that much anyway.
Your whole comment reads like someone that thinks people on welfare are living high on the hog and eating lobster.
EDIT: Added some stuff about how terrible a value college room and board is.
There were of course wealthy students who did all the things you talked about: going out, trips, expensive trips etc. but by no means were they the majority.
Also how many unis are there in the US? You work for all of them and know what "most" students live like?
Most importantly, even if what you said is true, what's an extra $5k a year to eat out and drink on top of your $150k tuition loans? The screwing has already been done.
That's getting shafted. For me it's fine because I had a career easily lined up. I don't see how the average person isn't getting hosed now though.
But I was mostly speaking of my experience in the UK, where the boomers paid no tuition fees and got a grant to cover living expenses. GenX generally paid no or little fees. Millenials are being saddled with more and more cost.
You mean rent is high, not that the service they get is good I think. Sharing rooms should not draw you 1000$ a month in a dorm.
I've never heard this before. Got a link that explains it? All I've heard from the few boomers I've talked to is that they generally worked during school and had some loans as well.
Try to do that today and you’d be washing dishes for the rest of your life and never pay off the student loans.
An exercise for those who wonder: look at historical tuition + fees costs and the minimum wage at that time. As I recall, a summer of 40 hours per week at minimum would more than cover tuition at the University of Virginia in 1970.
So, no, the education wasn't free. But it was a lot more affordable.
I did work during the summer but focused on academic work (and other things...) outside of that.
(+) the Scottish system is separate and still subsidised
Deleted Comment
> The Pensions Act 1995 introduced a series of reforms including a "minimum funding requirement" for pension funds. It also introduced something called "Section 75 pension debt", which meant if an employer "departed" a scheme, they could still be pursued for any shortfall... Since 2005 far more stringent rules have been in force - and, by this new yardstick, Plumbing Pensions was deemed to be under-funded.
So pension systems were set up with an element of shared liability. That's a bit of a risk for employers, but also insurance for pensioners if their individual small employers failed. The worst case was that the scheme as a whole collapsed if many members dropped out.
Then the government applied a minimum funding requirement to payment structures which had been running for years without planning for that value. Then, it converted shared risk from an insurance model to a legal obligation, which could apply to individuals if their businesses were small enough. Then, it raised the minimum on plans which had been running for 40+ years, and couldn't possibly be backfilled.
It's hard to overstate just how badly Menzies was treated by these regulations. His pension enrollment was not only moral but financially responsible - it only became a problem when the terms he'd agreed to were repeatedly, retroactively altered. Nor should he be blamed for being slow to react to the changes - the last-man-standing scheme meant someone was getting stuck with that bill. Large, incorporated companies, by contrast, could be bankrupted but would at least face no personal debts.
Meanwhile, what about the Mirror Group, which motivated of these changes? Well, Robert Maxwell died before seeing any liability for his theft. His sons and other company directors were acquitted of all charges. And the government bailed out 50% of the uncovered pensions.
It's one small case of the usual dynamic, I suppose: some large businesses and multimillionaires behaved badly, so they faced no significant consequences , but a bunch of unrelated people who'd behaved just fine had their lives upended by a clumsy response.
Big centralized retirement funds are scams and they always will be. Wherever there is a giant pile of other people's money managed by a bunch of bureaucrats, some suits will come along and find a way to profit from that pile of money in the most wasteful way possible.
Now all these retirement funds invest straight into low-yielding corporate stocks; so the money essentially ends up going into the pockets of corporate executives. And the worst part is that the government makes this compulsory.
I know superannuation is a scam but I'm forced to pay it anyway and I can't take the money out until I'm 65... I wouldn't be surprised if by that time, the retirement fund stock bubble will probably have popped and my retirement account will be worth $0... And all the fund managers and corporate executives will be rich.
[0] - https://www.nber.org/aginghealth/summer04/w10466.html
The conservative and libertarian trains of thought value individual agency above public welfare, which is a convenient point of view for people with the means to sustain themselves.
The plumber boss in question ran unincorporated, so his business's debts are his personal debt. Were he running an LLC, the debt would be on the company only.
all the profits go to you
Yours and other people’s money that you used to pay for things becomes a tax deductions for you
the worst thing that will happen is that the world’s most prestigious reporters will report that you “lost” a billion dollars and nobody will be the wiser that your personal balance sheet contains free and clear money and assets
That is definitely not the moral of the story.
Aside from that, what exactly do you think a 401k is, if not a vehicle for people to manage their own retirement? The only government involvement in a 401k is non-involvement in the form of allowing you to contribute pre-tax money. And the broker won't be involved either if you're smart and elect to invest in indexes, rather than mutual funds (which can have high fees).
Despite all that I agree that GP’s comment to abolish 401ks is throwing the baby out with the bath water.
Dead Comment
The jury are just asked "are they guilty?" and if they don't give an answer it is, by simple virtue, not a guilty verdict. Voila, verdict of "not guilty."
UK law has precedence for defendants who did do the deed being given a not guilty verdict by the jury already. We even gave it the name "perverse verdict." The wiki page on jury nullification has details.
Before being selected for a jury, jururs are asked (under penalty of perjury) if they can apply the law regardless of there personal feelings about it. Anyone who seriously considers nullification would be lying if they said yes, and would likely be excluded for saying no.
At least in the US, all jury nullification is, is the fact that the jury's decision making is above review. It is not so much that jury nullification is legal, it is that any ban on nullification is unenforcable. The courts therefore do whatever they can to avoid nullification.
https://youtube.com/watch?v=wXz85VuFMcU
Unfortunately pensions are an intrinsically boring topic. I recently met a professor of economics who lamented the £23bn deficit in the UK University pension scheme but admitted he was unable to get even his fellow affected economics academics to care.