Originally Posted by
DLax85
You control your B plan level of risk - completely, just you.
Dial it up - heavy equities. Dial it down - heavy cash & bonds.
Pass it on to your heirs
You won’t be able to tie your VB benefits to the “stock market”
You will be able to tie (expose) them to the VB plans investment returns
These won’t (and shouldn’t) be just equities. They will be about a 50% equities / 50% bonds mix
Benefit plans can’t just focus on growth (in the way a young pilot may load up on equities). They must make payments to beneficiaries, and therefore typically match their bond and dividend paying stocks to those liabilities.
And remember, VB benefit plans go “up” or “down” compared to the negotiated “hurdle rate”
The retirement plan can actually make a positive return, but one less than the hurdle rate, and then your retirement benefit would decrease.
All true - it would be great to have a more conservative investment approach in retirement but that's not possible with the vb plan. However, a "high water mark" is...but needs to be negotiated.