Subject:
pension plans A retirement plan is an arrangement to provide people with an income during retirement when they are no longer earning a steady income from employment. Often retirement plans require both the employer and employee to contribute money to a fund during their employment in order to receive defined benefits upon retirement. Funding can be provided in other ways, such as from labor unions, government agencies, or self-funded schemes. Pension plans are therefore a form of “deferred compensation”. (Wikipedia Feb 2010)
Q1 2006
By John Schroy, on June 15th, 2006 |

Net repurchases of equity by nonfinancial domestic corporations soared to an annual rate of $586.8 billion in Q1 2006 (a new record), pushing stock prices slightly higher. Domestic investors, through mutual funds, and foreign investors helped push prices upwards by buying equities.
This frenzied buying was five times the buyback rate in 2000, the year the Great Bubble collapsed!
FASB
By John Schroy, on April 1st, 2006 |

FASB concept statement No. 5 represents a further slow tightening of the screws as to the way pension liabilities are reported — one step in a long, excruciating journey that has been underway for decades. This rule is expected to have an incremental negative impact on old, unionized companies, further decline in private defined-benefit plans, and higher state and local taxes.
The Buyback Era
By John Schroy, on March 21st, 2006 |

The Federal Reserve national flow of funds accounts show that over the last five years, net sales of corporate equities by US households proceeded faster than corporations could match with buyback programs. The relative size and correlation between household stock sales and corporate equity buybacks indicates that most liquidations by individuals are related to executive option programs.
From 2001 to 2005, net equity sales by households totaled $1,156 billion, which suggests that corporate profits transferred to option holders in half a decade may have been on the order of one trillion dollars.
Popular Articles