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Senate Pension Hearings

 

Yesterday’s post mentioned the New York Times story on United Airlines’ delay of contributions to its defined benefit pension plans – allowed because of the peculiar “crediting” system of allowing past contributions to count toward current requirements, even if the assets have evaporated into thin air.

It was an interesting real-life illustration of what the Government Accountability Office discussed in their report on chronic underfunding of these plans. Yesterday, Senate hearings were chaired by Sen. Charles Grassley of Iowa, and an analysis of the United situation was offered by Bradley Belt, the executive director of the Pension Benefit Guaranty Corporation.

According to Belt:

“During the period from 2000 onward, when the true funded status of each of the company’s pension plans was deteriorating and the financial health of the company was becoming more precarious, the company:

* put little if any cash into the plans;

* rarely made a deficit reduction contribution;

* never provided any notices of underfunding to participants; and

* almost never paid a variable rate premium.

Yet the company still could claim that their plans were “fully funded” on a current liability basis.”

You know the rest of the story: United dumped its severely underfunded plans on the PBGC, which is chest-deep in underfunded plans and will need a bailout of its own. Belt pinned the blame not so much on the company, but on the nonsensical rules on “credits” for previous contributions and the smoothing mechanism for averaging pension assets and obligations. (For determining …

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Counting on discount – money saving made easy

 

No matter how much money we make, we always need a little bit more in order to buy something we like or pay an old bill. It is too bad that we cannot simply earn some more or spend as much as we want on clothes and other items, but being a grownup and a responsible person usually means that you have to sacrifice something for the higher cause. Luckily, there are so many ways to save money which are easy and simple that you will have no problem putting some of it aside without even noticing

The vast land of DIY

You don’t have to be super-talented or a sewing genius to make some great private investment trust projects. This is a fantastic way to use your old clothes and turn it into something new and useful. Resize your old tees, make cute little shorts with lace, sew your own skirts, or simply make a fashionable new accessory out of pieces you don’t wear anymore, for example a scarf out of your old, oversized shirt. You don’t necessarily have to use clothes or make clothes – DIY projects can make even pieces of furniture or wall decorations out of the most unexcited items. This way, you will save money on clothes, accessories, decorations, etc. and master a new skill along the way.

Buy out of season

It may seem ridiculous at first, buying clothes, coats, and shoes only to leave them in your wardrobe for months before you …