Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10 5/3/83; site umcp-cs.UUCP
Path: utzoo!linus!decvax!harpo!seismo!rlgvax!cvl!umcp-cs!dr_who
From: dr_who@umcp-cs.UUCP
Newsgroups: net.women
Subject: pension discrimination revisited
Message-ID: <1106@umcp-cs.UUCP>
Date: Sun, 24-Jul-83 02:59:14 EDT
Article-I.D.: umcp-cs.1106
Posted: Sun Jul 24 02:59:14 1983
Date-Received: Sun, 24-Jul-83 07:10:53 EDT
Organization: Univ. of Maryland, Computer Science Dept.
Lines: 26

Egalitarian principles die hard.  What would be so bad about insurance
companies discriminating on the basis of race as well as sex?  Of course,
there is the fear that such discrimination will be based on hate, rather
than statistics.  Let me repeat myself:

I suggest that discrimination based on feelings (biases) might be dealt with
by requiring insurance companies to show, "by a preponderance of evidence" or
some such rule, that their discriminations are based on statistics rather
than prejudice.

Perhaps I should point out that since whites live longer than blacks, blacks
would get higher pension benefits if insurers could discriminate.  Anyway, I
come back to the point that statistic-based discriminations allow insurance
companies to charge customers according to their cost to the company, which
is generally a good thing economically.  Case in point:  the company that
was sued in the original Supreme Court case has converted to a "fixed-year
payout", according to Bob Schleicher (see his article).  By being forced to
change to this system, the company probably lowered "consumer surplus" (see
your economics book), since it defeats the point of a pension plan:  to give
the retired person an income for the rest of his/her life.  The reason why
the company originally had a life-term plan rather than this fixed-year
payout was -- presumably -- because people wanted such a plan; they wanted
to be sure to have a certain income no matter how long they lived.

--Paul Torek, U of MD College Park