A Solution on Pension Fund Crisis

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ASolution on Pension Fund Crisis

Whenpeople sacrifice a portion of their salary to ensure that they get apension, the last story that they would like to hear is that thecompany is unable to pay them their pension. However, such asituation faces the nation`s largest pension funds and it’sweighing options of the best way to solve the situation. At hand, ifall people are paid as it is supposed to be, then by 2025 the companymay become insolvent and 407 000 current as well as future employeeswill be affected. However, a reduction of the payments by 23% perindividual will result to additional 30 years of the company beingactive before it becomes insolvent. The essay will discuss the bestoption to solve the problem in consideration of Badaracco’sframework.

Itis clear that these choices are both right. According to Badaracco,these are right-right dilemma situations, and there are fourframeworks of making a decision in such a situation. These structuresare based on net-net, individual rights, character and what will workin the world today. By net-net framework, one has to look at thepeople who are going to benefit from the decision as well as thosewho are going to lose. Risks are evaluated, and one must make adecision on the best way that will involve less risk and will benefitmost people.

Inthis case the option to pay as usual means that people will receivetheir pension up to 2025. However, from then, the company will becomeinsolvent and 407 000 people will live without a pension. When thesecond option is taken, then it means that all individuals, currentlyreceiving a pension, apart from the individual cases of sick, willget their pension less 23% but they will get the amount in an extra30 years. Maybe, the company might redeem itself in the course oftime if time may be a factor. All people will suffer the consequencesof this decision, but at least they will get something, however,little.

Onrights, people`s rights ought to be respected. People`s right, inthis case, involves receiving the money they saved as agreed. Theymade a sacrifice on their salaries and also signed an agreement withthe company to receive some payments on retirement. Both decisionsviolate these rights. The first decision on giving the correct amountto current retirees means that from the year 2025 no one will receiveanything even those that have just started their retirement period.The second option of reducing people`s payments by 23% will benefit alarge number of people but still the agreement will be dishonored.

Thethird framework will be of character. Question on a character willrise today, in future as well as upon the death of the decisionmaker. Today, people will criticize decisions made by the peopleaffected and sudden change of terms. Today, a small number ofindividuals will be affected as it entails only those receiving apension. However, in future, the number will increase. Today`sdecision will determine plenty of plans. However, it will increasethe time of the adoption of a better option. If time is increased,there are chances that better ideas will resurface to redeem thecompany. On character also the decision maker has to take an actionthat if he/she was a recipient would find it noble. It involves thedecision maker putting themselves in the shoes of all people waitingfor your decision and criticism that may arise.

Thelast question is about what will work in the world as it is. Itinvolves taking action on solving a problem. An individual who sitsand watch as things fall apart has barely made any decision. However,those who try to redeem the situation have made a decision and havetaken a risk to make things as the way they seem. However, it is notas easy as making a decision and sitting back. It is making adecision, accepting the risks and receiving the consequences of theaction as it comes.

Inan evaluation of the four frameworks, my decision will be to cutpeople`s payments by 23% and increase the time of company`s insolventby 30 years. From the first framework, more people are likely tobenefit from this decision in that the increased 30 years those whowill start their retirement during this period will get some payment.By rights, it is better a modified right that the one that iscompletely withdrawn. Meaning that the agreement will not be cut offcompletely but it will be sliced due to unavoidable circumstances.

Consideringthe issue of character, I would live with a decision of increasingtime. It means that at least, I have increased the time of thecompany by 30 years. It is enough time for the business to beredeemed. My decision will give the company and the stakeholders achance of reviving the agreement. Concerning the last framework ofwhat would work in the world today, decreasing the payments by 32%will work. It is so because the decision involves doing somethingabout the situation. Continuing the payments up to 2025 will besitting back and waiting for the company to collapse. However, mydecision means taking a risk that may be redeemed in future.

Inconclusion, I believe that my decision is ethical. It is ethicalbecause it puts into consideration all the frameworks that Badaraccoputs across. In addition, the decision is sensitive to all the peopleinvolved, the stakeholders, people`s rights, my character as well aspragmatism. By including the considerations of these stakeholders,the decision is acceptable and ethical.

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