Why pensions are dying.

[Rosemary2205]

It started long before Enron or Delta. Companies all over the country are forsaking traditional pension plans and opting for matching private accounts instead. The UAW, my former union, tells me this is a bad thing because it shifts the costs and responsibility for maintaining the account to the individual - who may or may not be sophisticated enough to handle investments.

I disagree. Completely.

I am in favor of pensions being phased out. I am in favor of traditional social security being phased out. And both being replaced by highly regulated and federally insured individual plans.

Why?? Because too many union workers don't make it to retirement and if they fall short by even 1 single day, their families end up with jack squat. Because companies go bankrupt. Because union bosses are mostly but not always honest. Because shit happens.

I would really like to see unions get behind changing the pension/social security structure in this country to individual accounts. Give workers the education they deserve in managing their savings successfully. Those few who are not educatable on these matters should be able to opt for savings plan managed for them by highly regulated and well supervised companies, or the union, or Fidelity or whoever.

I don't think Americans will end up with more retirement savings in the end. I think it will come out even dollar wise. But there is much more security knowing I have $50,000 in my own name than sitting around hoping my pension check shows up this month and Company "A" doesn't go bankrupt before I die. Or a union worker husband dies of a heart attack 3 months before his retirement day - his family would get nothing from the company under current pensions - but under individual plans would have all that they saved.

Unions have an EXTREMELY valuable function in this country but they cannot stop companies from going bankrupt. They obviously cannot force the government to require companies to honor their promises to retirees and their families by putting enough money aside. IMHO the time has come for unions to decide the best way to protect Americans is to take the money out of the hands of the company from the start and let individuals have control of it from day one. Get it up front instead of trusting the companies on the back end.

Just MHO.