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It looks like that entire article is blogspammed from this (good) CNNMoney article: http://management.fortune.cnn.com/2012/07/26/hostess-twinkie...

Wow. So much of Hostess' crisis, and the state of California and its cities hinge on pension obligations. It makes me wonder if it is even possible to create a pension plan that isn't eventually toxic.

Well, at least a private company can eventually just go bankrupt. Nobody knows what's going to happen in CA and IL.

Good point. San Jose discharged a lot of its future pension debt with negotiation. But my question wasn't how people get out from under the debt, rather it was how such a program could be designed so that it wouldn't have this issue.

For example, could you say

"You pay 10% of your salary and we'll match that, into an investment account that buys inflation protected treasuries, then when you reach the age of 55 you have the choice of getting 20%, 50% or 100% of your salary paid out annually until the total of the amount paid in + appreciation over that time reaches zero."

Basically once the company/state had matched the 10% they have no further obligation. And if you're genetics were great and you lived to 115 perhaps your 'salary' would run out at 75 long before you died. But what I don't know is how practical this is, it was so much easier when people actually died around 72 than it is now.

Thank you. Had I seen that article first I wouldn't have posted the one I found!

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