A cautionary tale about pensions and wages
A cautionary tale about pensions and wages
We have heard you should not count pension benefits until the day you receive them, but this move has surprised some. Massachusett's largest private employer Mass General Brigham, (MGB) formerly Partners Healthcare, has decided to "temporarily" freeze all pension benefit contributions and annual pay increases to 50,000 workers, and is also cutting executive and leadership pay. This is expected to last 1 year and is the result of shortfalls due to the pandemic. Article is below.
This decision comes as a surprise to some. "MGB is the largest healthcare system and employer in New England. With annual revenues of $14 billion, MGB is consistently the most profitable healthcare system in Massachusetts. In the last fiscal year, MGB earned $485 million in income from operations – the system’s most profitable year. During the COVID-19 pandemic, MGB has received $1 billion in accelerated Medicare payments and $314 million in grants from a federal relief program. The system reported having more than $230 million in cash on hand during the first quarter."
And this comes after several major financial decisions were made...
- Last year, a $1B expansion project was announced (article below)
- This year, a $100M branding exercise changed the name of Partners Healthcare to Mass General Brigham
- MGH in Boston cared for more COVID-19 patients than any other hospital in the state by a large margin while denying hazard pay to front line workers, while other hospitals in the state paid hazard pay
The story:
https://www.boston.com/news/coronavirus ... s-pandemic
The $1B project:
https://www.bizjournals.com/boston/news ... -foot.html
This decision comes as a surprise to some. "MGB is the largest healthcare system and employer in New England. With annual revenues of $14 billion, MGB is consistently the most profitable healthcare system in Massachusetts. In the last fiscal year, MGB earned $485 million in income from operations – the system’s most profitable year. During the COVID-19 pandemic, MGB has received $1 billion in accelerated Medicare payments and $314 million in grants from a federal relief program. The system reported having more than $230 million in cash on hand during the first quarter."
And this comes after several major financial decisions were made...
- Last year, a $1B expansion project was announced (article below)
- This year, a $100M branding exercise changed the name of Partners Healthcare to Mass General Brigham
- MGH in Boston cared for more COVID-19 patients than any other hospital in the state by a large margin while denying hazard pay to front line workers, while other hospitals in the state paid hazard pay
The story:
https://www.boston.com/news/coronavirus ... s-pandemic
The $1B project:
https://www.bizjournals.com/boston/news ... -foot.html
Light weight baby!
Re: A cautionary tale about pensions and wages
The post and articles are thought-provoking.
The organization apparently had two major projects under way when Covid 19 hit and damaged profitability. One was a billion dollar expansion of patient, admin, and parking space. The other project, one tenth the size, was for branding - - essentially public relations. I'm not sure about the need and value of the branding expenditure, but if this organization which was using capex for expansion of services is running into trouble, what of others which spent borrowed money to do stock buybacks?
The organization apparently had two major projects under way when Covid 19 hit and damaged profitability. One was a billion dollar expansion of patient, admin, and parking space. The other project, one tenth the size, was for branding - - essentially public relations. I'm not sure about the need and value of the branding expenditure, but if this organization which was using capex for expansion of services is running into trouble, what of others which spent borrowed money to do stock buybacks?
Re: A cautionary tale about pensions and wages
Folks,
We have a healthcare bubble and a college bubble. The bubbles have to burst sometime.
KlangFool
We have a healthcare bubble and a college bubble. The bubbles have to burst sometime.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: A cautionary tale about pensions and wages
A local university affiliated hospital is running 5 minute TV ads explaining how safe it is to have elective procedures done.
Another large local medical group has cut physician pay by 50% and laid off a lot of staff.
My neighbor, who operates a solo dentist practice with his wife as the business manager, shrugs his shoulders and says "just gotta do it".
People who thought they were in a high paid, recession proof job are finding this time is different.
Another large local medical group has cut physician pay by 50% and laid off a lot of staff.
My neighbor, who operates a solo dentist practice with his wife as the business manager, shrugs his shoulders and says "just gotta do it".
People who thought they were in a high paid, recession proof job are finding this time is different.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
- TheTimeLord
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Re: A cautionary tale about pensions and wages
You are going to have to help me on how this relates to the article. Is there any mentioned of benefits accrued not being honored or covered by the PBGC?RobLyons wrote: ↑Fri Jun 19, 2020 7:32 am We have heard you should not count pension benefits until the day you receive them, but this move has surprised some. Massachusett's largest private employer Mass General Brigham, (MGB) formerly Partners Healthcare, has decided to "temporarily" freeze all pension benefit contributions and annual pay increases to 50,000 workers, and is also cutting executive and leadership pay. This is expected to last 1 year and is the result of shortfalls due to the pandemic. Article is below.
This decision comes as a surprise to some. "MGB is the largest healthcare system and employer in New England. With annual revenues of $14 billion, MGB is consistently the most profitable healthcare system in Massachusetts. In the last fiscal year, MGB earned $485 million in income from operations – the system’s most profitable year. During the COVID-19 pandemic, MGB has received $1 billion in accelerated Medicare payments and $314 million in grants from a federal relief program. The system reported having more than $230 million in cash on hand during the first quarter."
And this comes after several major financial decisions were made...
- Last year, a $1B expansion project was announced (article below)
- This year, a $100M branding exercise changed the name of Partners Healthcare to Mass General Brigham
- MGH in Boston cared for more COVID-19 patients than any other hospital in the state by a large margin while denying hazard pay to front line workers, while other hospitals in the state paid hazard pay
The story:
https://www.boston.com/news/coronavirus ... s-pandemic
The $1B project:
https://www.bizjournals.com/boston/news ... -foot.html
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: A cautionary tale about pensions and wages
Even in good times companies have steadily been freezing private pension plans to save money. I had one that was frozen back in the 1990s.
That not only saves them a lot of money but it also means that older workers are much more likely to voluntarily leave on their own which is perceived as being a good thing.
That not only saves them a lot of money but it also means that older workers are much more likely to voluntarily leave on their own which is perceived as being a good thing.
Re: A cautionary tale about pensions and wages
People primarily associate bubbles with costs (healthcare costs, real estate and tuition).
Does this apply to physician/nurse salaries (for the healthcare bubble) and professor salaries (for the college bubble) too? Are salaries in these professions going to decrease. American doctors in the U.S. are the highest paid in the world I think.
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Re: A cautionary tale about pensions and wages
X528,X528 wrote: ↑Fri Jun 19, 2020 9:18 amPeople primarily associate bubbles with costs (healthcare costs, real estate and tuition).
Does this apply to physician/nurse salaries (for the healthcare bubble) and professor salaries (for the college bubble) too? Are salaries in these professions going to decrease. American doctors in the U.S. are the highest paid in the world I think.
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
1) If the whole industry is going to hell, why would the salary of those working in the industry not being affected? Just look at the Telecom and Oil industries.
2) If college education is going remote, what is there to stop the top universities of the world to compete to the universities inside the USA?
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: A cautionary tale about pensions and wages
Don’t count on your employer to maintain their benefit programs into perpetuity without changes. The benefits you have accrued to date are typically very safe, but anything is possible with respect to benefits offered in the future.
Don’t expect dinosaurs to continue to roam the Earth.
Don’t expect dinosaurs to continue to roam the Earth.
80% global equities (faith-based tilt) + 20% TIPS (LDI)
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Re: A cautionary tale about pensions and wages
With the amount of debt, years of training, and low pay during residency, physician pay should not be decreased. A family medicine doctor in 2019, on average, generates 2.1 million dollars for their hospital system and earns, on average, total compensation of $247,000 (incl. benefits and bonus). This salary is after incurring an average of > $200,000 student loans and seven years of post-college training.
- TheTimeLord
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Re: A cautionary tale about pensions and wages
Exactly, why would anyone being counting something that is not yet accrued and vested? This thread topic confuses me.Horton wrote: ↑Fri Jun 19, 2020 9:37 am Don’t count on your employer to maintain their benefit programs into perpetuity without changes. The benefits you have accrued to date are typically very safe, but anything is possible with respect to benefits offered in the future.
Don’t expect dinosaurs to continue to roam the Earth.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: A cautionary tale about pensions and wages
Is this any different than my employer reducing the 401k match or making it harder to get a bonus? To me, this pension freeze is the same as any other compensation cut. Your employer has altered the terms of your employment, and you can choose to stay or move on.
This does not appear to be a case of a company cutting pension benefits that have already been earned, which is a situation that would actually warrant caution.
I guess my company does not give everyone a raise each year, so it wouldn't be such a shock to see wage freezes.
This does not appear to be a case of a company cutting pension benefits that have already been earned, which is a situation that would actually warrant caution.
I guess my company does not give everyone a raise each year, so it wouldn't be such a shock to see wage freezes.
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Re: A cautionary tale about pensions and wages
I guess my take is really no one is 100% safe in term of job security and benefit. It’s all relative to everything else. I think it’s always controversial to argue when the employer cut worker’s benefit, but that would be another discussion.
Re: A cautionary tale about pensions and wages
That was my reaction.TheTimeLord wrote: ↑Fri Jun 19, 2020 8:26 amYou are going to have to help me on how this relates to the article. Is there any mentioned of benefits accrued not being honored or covered by the PBGC?
Plus it's not like the pension is truly guaranteed on day one of retirement, not without a lump sum anyway.
Depending upon the provider and other circumstances it is perfectly reasonable to expect ones pension to pay. I think it's reasonable to understand the defined benefit may change, possibly significantly. However, it would have to be the unusual pension to wholly discount it.
Re: A cautionary tale about pensions and wages
There was a surprise here?
Re: A cautionary tale about pensions and wages
TheTimeLord wrote: ↑Fri Jun 19, 2020 9:42 am Exactly, why would anyone being counting something that is not yet accrued and vested?
My pension was vested. And then it changed. Again and again and again. Quoting my 2016 self:
P.S. Pension has changed twice more since the ^post. Luckily, it's a really small amount of my retirement cache. I've since lapped 65, but I'm waiting 'til 70 to collect. Que sera, sera...Flobes wrote: ↑Tue Feb 23, 2016 11:06 am They can change the rules at any time.
When I stopped working at age 57, I was vested with 5 years in my pension system. I called to get my money out as a lump sum. I was convinced that if I waited until 60, I'd get another 25%. As I didn't need the money, I happily opted for the delayed benefit.
Then they changed the rules, and I couldn't get the money until I turned 65. And then they changed the rules, and lowered the payout amounts. And then they changed the rules yet again, and I am no longer vested: I will now get 25% less than I would have received years ago when I made that phone call. When I turn 65, I'll get whatever.
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Re: A cautionary tale about pensions and wages
Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
Re: A cautionary tale about pensions and wages
How many more posts until you think this thread gets locked?
80% global equities (faith-based tilt) + 20% TIPS (LDI)
Re: A cautionary tale about pensions and wages
Pensions are going the way of the dodo bird. I’m actually shocked that any company still has them.......
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Re: A cautionary tale about pensions and wages
Exactly. And this is why 401ks are infinitely better.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
Depending on a pension, which is nothing more than an unsecured obligation of the employer, is like putting _all_ of one's retirement money into _unsecured_ bonds issued by a _single_ entity.
Anakin
Re: A cautionary tale about pensions and wages
Accrued pension benefits are not always safe especially if you have a large one. I know someone that was a pilot for a major airline and near early retirement with a large pension. The airline went through bankruptcy so he lost about two thirds of then pension he had accrued at that point because it was that much above the amount that the PBGC would insure.Horton wrote: ↑Fri Jun 19, 2020 9:37 am Don’t count on your employer to maintain their benefit programs into perpetuity without changes. The benefits you have accrued to date are typically very safe, but anything is possible with respect to benefits offered in the future.
Don’t expect dinosaurs to continue to roam the Earth.
The PBGC guarantees are not all that high for early retirees. There are lots of details but for a 55 year old it is only about $2,500 a month at 55.
https://www.pbgc.gov/wr/benefits/guaran ... -guarantee
Strategic bankruptcies to get out of pension obligations are way too common.
Re: A cautionary tale about pensions and wages
There's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
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Re: A cautionary tale about pensions and wages
Larceny is human nature. That's why pensions are a terrible idea and 401ks are a much better approach.JonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
People should be able to control their own destiny.
Anakin
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Re: A cautionary tale about pensions and wages
Apart from cutting out the scope for larceny, 401ks also promote worker mobility, which is a very good thing.
Also it's just good practice to get paid when the work is done, as opposed to hoping the money will sit around to get paid out decades later.
Imagine if you were supposed to pay the plumber half the money when the work is done, and hold the other half to be paid when he's old and retired. Terrible idea, right?
Anakin
Also it's just good practice to get paid when the work is done, as opposed to hoping the money will sit around to get paid out decades later.
Imagine if you were supposed to pay the plumber half the money when the work is done, and hold the other half to be paid when he's old and retired. Terrible idea, right?
Anakin
Re: A cautionary tale about pensions and wages
I’m very, very happy to still be accruing benefits in my company’s now closed and well-funded pension plan. I also participate in our 401(k), but when the market tanks 20% the company gets hit in the pension vs. the employee with the 401(k).anakinskywalker wrote: ↑Fri Jun 19, 2020 2:50 pmLarceny is human nature. That's why pensions are a terrible idea and 401ks are a much better approach.JonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
People should be able to control their own destiny.
Anakin
Re: A cautionary tale about pensions and wages
Having both a pension and a 401k is good too.anakinskywalker wrote: ↑Fri Jun 19, 2020 2:50 pmLarceny is human nature. That's why pensions are a terrible idea and 401ks are a much better approach.JonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
People should be able to control their own destiny.
Anakin
Would a federal government FERS pension be viewed the same way? Fed. employees also have the TSP (which is like a 401k).
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Re: A cautionary tale about pensions and wages
We hear retirement crises and crises in pension programs. Pension programs and individual retirement savings have a lot in common. In both cases, you have to 1) estimate future obligations/expenses, 2) assume reasonable rates of return for investment, and finally 3) set aside periodic contributions based on 1) and 2). If you overly underestimate 1) and/or use unrealistically rosy numbers for 2), it will make the current actors happy at the risk of paying dearly for the mishap later and/or dumping the burden to a third party. This forum is presumably focused on finding a balancing act on individual levels. Instead of looking for scapegoats, we should look for the causes of the problems as a part of learning process.JonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
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Re: A cautionary tale about pensions and wages
JonnyB, I like your postJonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
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Re: A cautionary tale about pensions and wages
Spot on.X528 wrote: ↑Fri Jun 19, 2020 9:18 am
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Re: A cautionary tale about pensions and wages
What type of pension is this?Flobes wrote: ↑Fri Jun 19, 2020 12:09 pmTheTimeLord wrote: ↑Fri Jun 19, 2020 9:42 am Exactly, why would anyone being counting something that is not yet accrued and vested?My pension was vested. And then it changed. Again and again and again. Quoting my 2016 self:
P.S. Pension has changed twice more since the ^post. Luckily, it's a really small amount of my retirement cache. I've since lapped 65, but I'm waiting 'til 70 to collect. Que sera, sera...Flobes wrote: ↑Tue Feb 23, 2016 11:06 am They can change the rules at any time.
When I stopped working at age 57, I was vested with 5 years in my pension system. I called to get my money out as a lump sum. I was convinced that if I waited until 60, I'd get another 25%. As I didn't need the money, I happily opted for the delayed benefit.
Then they changed the rules, and I couldn't get the money until I turned 65. And then they changed the rules, and lowered the payout amounts. And then they changed the rules yet again, and I am no longer vested: I will now get 25% less than I would have received years ago when I made that phone call. When I turn 65, I'll get whatever.
For the ashes of his fathers, And the temples of his gods. |
Pensions= 2X yearly expenses. Portfolio= 40X yearly expenses.
Re: A cautionary tale about pensions and wages
They are higher paid for a good reason. My student loan is $450,000 and it took me 12 years to become a physician. If you decrease my salary, I will just move to Canada and let you see a nurse practitioner instead. Most likely I will retire in 15 years and this will be right when I am about to be at my experiance peak. No, I will not have a mansion, a Lamborghini or even Mercedes Benz. I will live in a small house and drive a Honda. But at least I will not have to deal with the corporate nonsense and government metrics. A lot of young physicians who graduated with me are looking into the same, FIRE and call it a day. We are burned out and public still thinks that we are millionaires.X528 wrote: ↑Fri Jun 19, 2020 9:18 amPeople primarily associate bubbles with costs (healthcare costs, real estate and tuition).
Does this apply to physician/nurse salaries (for the healthcare bubble) and professor salaries (for the college bubble) too? Are salaries in these professions going to decrease. American doctors in the U.S. are the highest paid in the world I think.
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Physician pay is not the problem here, it is the corporate world that cares more about money than your health. Patient satisfaction scores more than patient outcomes. And of course the government, that cares more about useless metrics requiring me to click 100 times per visit than me actually spending more time with you. There has been entire industry created to exploit physicians and patients.
You have not taken into account 7-8% interest on federal loans for both graduate and undergraduate and then 3-7 years of post graduate training during which those loans are not being paid.potatopancake wrote: ↑Fri Jun 19, 2020 9:40 am With the amount of debt, years of training, and low pay during residency, physician pay should not be decreased. A family medicine doctor in 2019, on average, generates 2.1 million dollars for their hospital system and earns, on average, total compensation of $247,000 (incl. benefits and bonus). This salary is after incurring an average of > $200,000 student loans and seven years of post-college training.
Re: A cautionary tale about pensions and wages
How are the "mid-level" healthcare professions (e.g., physician assistants, CRNAS, nurse practitioners, etc.) going to affect physicians and their salaries in the future? States seem to be giving more authority and increasing scope of practice for these mid-level practitioners as time goes on.Blue456 wrote: ↑Fri Jun 19, 2020 5:21 pmThey are higher paid for a good reason. My student loan is $450,000 and it took me 12 years to become a physician. If you decrease my salary, I will just move to Canada and let you see a nurse practitioner instead. Most likely I will retire in 15 years and this will be right when I am about to be at my experiance peak. No, I will not have a mansion, a Lamborghini or even Mercedes Benz. I will live in a small house and drive a Honda. But at least I will not have to deal with the corporate nonsense and government metrics. A lot of young physicians who graduated with me are looking into the same, FIRE and call it a day. We are burned out and public still thinks that we are millionaires.X528 wrote: ↑Fri Jun 19, 2020 9:18 amPeople primarily associate bubbles with costs (healthcare costs, real estate and tuition).
Does this apply to physician/nurse salaries (for the healthcare bubble) and professor salaries (for the college bubble) too? Are salaries in these professions going to decrease. American doctors in the U.S. are the highest paid in the world I think.
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Physician pay is not the problem here, it is the corporate world that cares more about money than your health. Patient satisfaction scores more than patient outcomes. And of course the government, that cares more about useless metrics requiring me to click 100 times per visit than me actually spending more time with you. There has been entire industry created to exploit physicians and patients.
You have not taken into account 7-8% interest on federal loans for both graduate and undergraduate and then 3-7 years of post graduate training during which those loans are not being paid.potatopancake wrote: ↑Fri Jun 19, 2020 9:40 am With the amount of debt, years of training, and low pay during residency, physician pay should not be decreased. A family medicine doctor in 2019, on average, generates 2.1 million dollars for their hospital system and earns, on average, total compensation of $247,000 (incl. benefits and bonus). This salary is after incurring an average of > $200,000 student loans and seven years of post-college training.
The last time I went to the doctor I was actually seen by a physician assistant (PA) and a nurse practitioner - I never did meet a physician (this was in Florida). I think some states are letting physician assistants and nurse practitioners work independently of a physician. The receptionist at the front desk in the clinic blurted out that the "PA could do everything that a doctor can and do treatments," but said I could still see the doctor if I wanted. They were really pushing me to just see the PA.
Re: A cautionary tale about pensions and wages
TheTimeLord wrote: ↑Fri Jun 19, 2020 8:26 amYou are going to have to help me on how this relates to the article. Is there any mentioned of benefits accrued not being honored or covered by the PBGC?RobLyons wrote: ↑Fri Jun 19, 2020 7:32 am We have heard you should not count pension benefits until the day you receive them, but this move has surprised some. Massachusett's largest private employer Mass General Brigham, (MGB) formerly Partners Healthcare, has decided to "temporarily" freeze all pension benefit contributions and annual pay increases to 50,000 workers, and is also cutting executive and leadership pay. This is expected to last 1 year and is the result of shortfalls due to the pandemic. Article is below.
This decision comes as a surprise to some. "MGB is the largest healthcare system and employer in New England. With annual revenues of $14 billion, MGB is consistently the most profitable healthcare system in Massachusetts. In the last fiscal year, MGB earned $485 million in income from operations – the system’s most profitable year. During the COVID-19 pandemic, MGB has received $1 billion in accelerated Medicare payments and $314 million in grants from a federal relief program. The system reported having more than $230 million in cash on hand during the first quarter."
And this comes after several major financial decisions were made...
- Last year, a $1B expansion project was announced (article below)
- This year, a $100M branding exercise changed the name of Partners Healthcare to Mass General Brigham
- MGH in Boston cared for more COVID-19 patients than any other hospital in the state by a large margin while denying hazard pay to front line workers, while other hospitals in the state paid hazard pay
The story:
https://www.boston.com/news/coronavirus ... s-pandemic
The $1B project:
https://www.bizjournals.com/boston/news ... -foot.html
Guess I wasn't clear on what I meant here.. So I don't mean they are eliminating benefits accrued. Rather, pension contributions are frozen this year, and of course they could be frozen for another year or longer, especially if there is another wave or another financial down turn, or reduced indefinitely.. or eliminated altogether.
Light weight baby!
Re: A cautionary tale about pensions and wages
TheTimeLord wrote: ↑Fri Jun 19, 2020 9:42 amExactly, why would anyone being counting something that is not yet accrued and vested? This thread topic confuses me.Horton wrote: ↑Fri Jun 19, 2020 9:37 am Don’t count on your employer to maintain their benefit programs into perpetuity without changes. The benefits you have accrued to date are typically very safe, but anything is possible with respect to benefits offered in the future.
Don’t expect dinosaurs to continue to roam the Earth.
Have a conversation with 10 hospital employees that have and are aware of their pension. I'd be willing to bet at least 7 or 8 are banking on their pension as a major part of their retirement.
Light weight baby!
Re: A cautionary tale about pensions and wages
BlueCable wrote: ↑Fri Jun 19, 2020 9:48 am Is this any different than my employer reducing the 401k match or making it harder to get a bonus? To me, this pension freeze is the same as any other compensation cut. Your employer has altered the terms of your employment, and you can choose to stay or move on.
This does not appear to be a case of a company cutting pension benefits that have already been earned, which is a situation that would actually warrant caution.
I guess my company does not give everyone a raise each year, so it wouldn't be such a shock to see wage freezes.
I'm not complaining at all about the decision, just sharing the story. And I'd say reducing a 401k match is much less financially impactful than a full year of frozen pay and pension contributions. Not as drastic as cutting benefits that were already earned. So you make a great point there
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Re: A cautionary tale about pensions and wages
I'm glad it's working well for you. I consider myself lucky to not have to rely on someone else's creditworthiness for my retirement security. I prefer the control I have over my destiny with 401ks.Morford wrote: ↑Fri Jun 19, 2020 4:16 pmI’m very, very happy to still be accruing benefits in my company’s now closed and well-funded pension plan. I also participate in our 401(k), but when the market tanks 20% the company gets hit in the pension vs. the employee with the 401(k).anakinskywalker wrote: ↑Fri Jun 19, 2020 2:50 pmLarceny is human nature. That's why pensions are a terrible idea and 401ks are a much better approach.JonnyB wrote: ↑Fri Jun 19, 2020 1:21 pmThere's no fantasy about it. Actuarial tables are quite accurate, even projecting out decades. An employer can know with quite precision exactly how much money they need to pay out and when.MathIsMyWayr wrote: ↑Fri Jun 19, 2020 12:12 pm Any illusion of job security or rosy future benefits such as pension is just an illusion. No employer can guarantee such things in the real world. It is not the fault of the employer. It is simply not sustainable. Any guarantee for the future is nothing but kicking the can down the road. I like a job security and a cushy pension, but the reality cannot support such a fantasy.
The problem comes when employers fail to fund their pensions adequately given the accurate information they are provided. That isn't a failure of the pension system. That is a failure of management.
Many of the pension problems occur because managers cut their pension funding when times are good, relying on stock market increases. And likewise they cut funding when times are bad because they say they can't afford it now. That's just bad management.
Saying that pensions are a fantasy is just providing an excuse for larcenous managers.
People should be able to control their own destiny.
Anakin
I don't mind markets tanking either. When markets tank I rebalance and/or keep buying low.
Anakin
Re: A cautionary tale about pensions and wages
It is simple math. It is cheaper for insurance company to pay nurse practitioner for your visit $30 than to pay to the physician $100. A nurse practitioner with 1/10 the training and 1/5 the loans is also more likely to accept lower pay. A large corporation that owns hospitals makes more money when they can have nurse practitioners and PAs do the job of physicians. Their salaries are cheaper. Which means a nice big bonus to the CEO, COO, CMO and all the other Cs.X528 wrote: ↑Fri Jun 19, 2020 6:02 pmHow are the "mid-level" healthcare professions (e.g., physician assistants, CRNAS, nurse practitioners, etc.) going to affect physicians and their salaries in the future? States seem to be giving more authority and increasing scope of practice for these mid-level practitioners as time goes on.Blue456 wrote: ↑Fri Jun 19, 2020 5:21 pmThey are higher paid for a good reason. My student loan is $450,000 and it took me 12 years to become a physician. If you decrease my salary, I will just move to Canada and let you see a nurse practitioner instead. Most likely I will retire in 15 years and this will be right when I am about to be at my experiance peak. No, I will not have a mansion, a Lamborghini or even Mercedes Benz. I will live in a small house and drive a Honda. But at least I will not have to deal with the corporate nonsense and government metrics. A lot of young physicians who graduated with me are looking into the same, FIRE and call it a day. We are burned out and public still thinks that we are millionaires.X528 wrote: ↑Fri Jun 19, 2020 9:18 amPeople primarily associate bubbles with costs (healthcare costs, real estate and tuition).
Does this apply to physician/nurse salaries (for the healthcare bubble) and professor salaries (for the college bubble) too? Are salaries in these professions going to decrease. American doctors in the U.S. are the highest paid in the world I think.
Regarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Physician pay is not the problem here, it is the corporate world that cares more about money than your health. Patient satisfaction scores more than patient outcomes. And of course the government, that cares more about useless metrics requiring me to click 100 times per visit than me actually spending more time with you. There has been entire industry created to exploit physicians and patients.
You have not taken into account 7-8% interest on federal loans for both graduate and undergraduate and then 3-7 years of post graduate training during which those loans are not being paid.potatopancake wrote: ↑Fri Jun 19, 2020 9:40 am With the amount of debt, years of training, and low pay during residency, physician pay should not be decreased. A family medicine doctor in 2019, on average, generates 2.1 million dollars for their hospital system and earns, on average, total compensation of $247,000 (incl. benefits and bonus). This salary is after incurring an average of > $200,000 student loans and seven years of post-college training.
The last time I went to the doctor I was actually seen by a physician assistant (PA) and a nurse practitioner - I never did meet a physician (this was in Florida). I think some states are letting physician assistants and nurse practitioners work independently of a physician. The receptionist at the front desk in the clinic blurted out that the "PA could do everything that a doctor can and do treatments," but said I could still see the doctor if I wanted. They were really pushing me to just see the PA.
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Re: A cautionary tale about pensions and wages
[ quote fixed by admin LadyGeek]X528 wrote: ↑Fri Jun 19, 2020 9:18 amRegarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Really ? [Rude comment removed by admin LadyGeek] Half the article is him telling me what he has done. Oh please...
An important key to investing is having a well-calibrated sense of your future regret.
Re: A cautionary tale about pensions and wages
Despite all of his assertions to the contrary, he is definitely not a good writer.BernardShakey wrote: ↑Sat Jun 20, 2020 12:36 am Really ? [Rude comment removed by admin LadyGeek] Half the article is him telling me what he has done. Oh please...
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Re: A cautionary tale about pensions and wages
One will have no trouble in finding any garbage which suits his taste on the internet.simmias wrote: ↑Sat Jun 20, 2020 6:01 amDespite all of his assertions to the contrary, he is definitely not a good writer.BernardShakey wrote: ↑Sat Jun 20, 2020 12:36 am Really ? [Rude comment removed by admin LadyGeek] Half the article is him telling me what he has done. Oh please...
Re: A cautionary tale about pensions and wages
This is only about 60 days worth of expenses. That's scary territory for a healthcare system. I don't blame them for trying to cut costs any way possible to survive during this time.
Re: A cautionary tale about pensions and wages
RobLyons,
It is very simple and obvious.
A) The wage growth, in general, has not kept up with inflation.
B) The healthcare cost and college education cost consistently exceed inflation.
With (A) and (B) together, you have an unsustainable bubble. It is just a question when it will burst.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: A cautionary tale about pensions and wages
I wish both burst tomorrow. BTW, i am ready to pay more taxes for both if they tell me they would be very affordable.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
Re: A cautionary tale about pensions and wages
This is not a singular case, I am aware of other colleges freezing retirement contributions, reducing salaries and furloughing and laying off workers. This is not over.. There will be a ripple effect if two of the largest employment groups in the country start having issues. Queue the layoffs in K-12 education next.. [Political comment removed by moderator oldcomputerguy] I expect rough times ahead.
"If more of us valued food and cheer and song above hoarded gold, it would be a merrier world." |
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Re: A cautionary tale about pensions and wages
It’s not different but then again, they probably never read The Great Depression - A Diary by Benjamin Roth. They should read the chapter about the doctor who earned a dollar, that was his earnings for an entire day.stan1 wrote: ↑Fri Jun 19, 2020 8:21 am A local university affiliated hospital is running 5 minute TV ads explaining how safe it is to have elective procedures done.
Another large local medical group has cut physician pay by 50% and laid off a lot of staff.
My neighbor, who operates a solo dentist practice with his wife as the business manager, shrugs his shoulders and says "just gotta do it".
People who thought they were in a high paid, recession proof job are finding this time is different.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: A cautionary tale about pensions and wages
Two ways to build up reserves - less spending and careful long term planning. Who were the board of trustees and who was the CFO? They should be shown the door. It’s a case of thinking that the good times last forever - a sign of an inexperienced board and a CFO who was too optimistic and lacked real experience.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: A cautionary tale about pensions and wages
That’s not accurate - Pension benefits earned can not be cut or taken away. Unearned benefits however can be.RobLyons wrote: ↑Fri Jun 19, 2020 6:39 pmBlueCable wrote: ↑Fri Jun 19, 2020 9:48 am Is this any different than my employer reducing the 401k match or making it harder to get a bonus? To me, this pension freeze is the same as any other compensation cut. Your employer has altered the terms of your employment, and you can choose to stay or move on.
This does not appear to be a case of a company cutting pension benefits that have already been earned, which is a situation that would actually warrant caution.
I guess my company does not give everyone a raise each year, so it wouldn't be such a shock to see wage freezes.
I'm not complaining at all about the decision, just sharing the story. And I'd say reducing a 401k match is much less financially impactful than a full year of frozen pay and pension contributions. Not as drastic as cutting benefits that were already earned. So you make a great point there
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: A cautionary tale about pensions and wages
I get concerned when people [(removed) --admin LadyGeek] insinuate they might know what is non-marketable bull and what is not. Opinions like that is, IMO, why some high schools don't teach art classes anymore.BernardShakey wrote: ↑Sat Jun 20, 2020 12:36 am[ quote fixed by admin LadyGeek]X528 wrote: ↑Fri Jun 19, 2020 9:18 amRegarding the college bubble:
https://johntreed.com/blogs/john-t-reed ... om-scratch
Really ? [Rude comment removed by admin LadyGeek] Half the article is him telling me what he has done. Oh please...