AOL Daily Finance: “People@Work – Now, Governments Are Shifting Pension Burdens Onto Workers”

As states look for ways to trim massive deficits, the battle over public employees’ pay and benefits continues to heat up.

Lubin Finance Professors Lewis Altfest and Ronald Filante comment on the shift by public-sector employees’ retirement plans to mirror those of the private sector by shifting to defined-contribution plans, aka 401 (k)s.

Both Pace Finance Professors Ronald Filante and Lew Altfest agree that from a worker’s perspective, traditional pension plans are a better deal, although financial planning by definition is a very personal process.

Professor Filante: “It makes a lot of sense for individuals to determine the key variables, such as risk tolerance, expected date of retirement and length of retirement.”

Professor Altfest: “The challenge many workers face is that they’re just not good investors.  Investing requires knowledge of how markets work, and few people, for example, understand how bonds work and when is the best time to buy them.”

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