Originally Posted by
macduffy
Yes, there's plenty of good reasons why "low and lower" interest rates have their negative effects. Benefit promise funds are funded on sets of assumptions which include expected returns, salary/wage rate increases, life expectancy, etc. When interest rates drop substantially, let alone go negative, funding rates have to compensate, initially by increasing the employer's rate of contribution - which many can't afford, and may go out of business. A vicious circle of cost and failure follows. Self funded retirees have a similar problem, a lower income to spend, retailers feel the pinch, reduce staff...……..