Pensions: The Next Casualty of Wall Street

[marmar]

via Dollars & Sense:



Pensions: The Next Casualty of Wall Street
by Dollars and Sense

From Mark Brenner at Labor Notes:


Pensions: The Next Casualty of Wall Street
By Mark Brenner


Nobody wants to admit it, but the next casualty of the Wall Street meltdown will probably be your golden years. For years corporations have been trying to choke the life out of traditional pensions, working hard to get out from under the risk—and the cost—of providing for their retirees. Between last year's credit crunch and changes to federal pension laws, they may get their wish.

Nearly $4 trillion worth of retirement savings were wiped out in the first weeks of the 2008 financial freefall. Half of the drop was concentrated in traditional pension plans, also known as defined-benefit plans. While most workers in these plans haven't had their monthly benefits cut, unlike the 46 million people riding the stock market with 401(k) defined-contribution plans, the storm clouds are gathering.

Labor needs a strategy to protect what we've won. But holding our ground requires moving from defense to offense. If the pension crisis is going to be solved for union members, it has to be solved for everyone.

UNCOMFORTABLE ARITHMETIC

Even before the financial crisis, traditional pensions were a vanishing breed. Thirty years ago more than a third of the private sector workforce had traditional pensions. Last year that number was down to 16 percent.

Driving the decline were employers looking to get off cheap, eliminating pensions entirely when they could get away with it, and when they couldn't, shifting to 401(k)s. These programs were legalized in 1978 and were originally designed to supplement traditional pensions. Now they're choking them out like kudzu.

Corporations got a great deal, paying about half what they used to towards their workers' retirement by the '90s. Even more important—as anyone who has opened their 401(k) statement recently can attest—the move shifted risk off companies and onto us. .........(more)

The complete piece is at: http://www.dollarsandsense.org/blog/2009/10/pensions-next-casualty-of-wall-street.html

[orpupilofnature57]

1. Criminal

[Kablooie]

9. So, what's new?

[Deja Q]

2. hmmm

http://www.politifact.com/truth-o-meter/promises/promise/508/allow-penalty-free-hardship-withdrawals-from-retir/

http://www.politifact.com/truth-o-meter/promises/promise/21/require-automatic-enrollment-in-401k-plans/
(siphon money toward the porky piggies in the market?)

[inna]

3. pensions are already a casualty, but....

i guess we ain't seen nothing yet.

[wroberts189]

4. It is pretty damn sad we allow this to happen. knr

[Peregrine Took]

5. We should have spoken up when Raygun went after the air traffic controllers

and then in 2000 when they stole the presidency.

Its too late now.

[orpupilofnature57]

6. Sad but true

[TheMadMonk]

11. Try Vietnam or even earlier. Once the USG became a life support...

...system for the Military Industrial Complex it was over.

[orpupilofnature57]

13. Woodrow Wilson WWI

[slipslidingaway]

7. Important article ...

a few more snips>>>

"...Nine of the 10 largest pension defaults in history occurred since 2000, leaving the PBGC with a deficit of $11 billion at the end of 2008. That gap could swell to more than $100 billion over the next few years, amounting to a backdoor bailout for big corporations, and a bitter pill for abandoned retirees.

Workers at Republic Steel saw first hand how it works when they had their pensions cut by $1,000 a month in 2002 by the PBGC and then cut again in 2004. Five workers from the Lorain, Ohio, plant committed suicide after the first time their pension was diminished. In the second round of cuts, retirees like Bruce Bostick, former grievance chair for USW Local 1104, saw their retirements fall from $1,047 a month to $125.

The situation for public sector workers isn't much better. Although 80 percent of public employees have traditional pensions, those benefits are now in the cross-hairs of conservative and liberal politicians. Two-thirds of public sector pension plans are underfunded—to the tune of $430 billion—and state and local budget crises are pitting taxpayers against public employees from California to Maine..."

[Snarkoleptic]

8. Pension...what's a pension? (voice of all of us Gen-Y'ers)

[orpupilofnature57]

12. The pension ,was the reward After a life of devotion to a company

by the time you people get there, companies will of already bought the pensions and all that will be left will be devotion until the after life.

[Snarkoleptic]

14. My point is that anyone 40 or under has no pension.

We were sold the alternative 401(k) privatization scheme which caused many to stumble blindly into investing their retirement funds in the stock market.
As one of the lucky few, I actively managed my 401(k) and pulled out of the various funds and kept in "cash" in mid-2006.

[orpupilofnature57]

15. Smart ,my wife saw it in 07 and had me pull a chunk when I was 50

I really do speak to people your age that have been victimized since Graduation and have never been able to contribute to a retirement fund.A lot of people my age are ignorant to that fact ,and that was the reason for my post.

[Kablooie]

10. So nice that they require you to donate for 40 years then cancel before they pay you back.

My industry just killed a unique, free, old folks home that was supported by industry voluntary donations.

In your twilight years you could have a small private bungalow with assisted care even if you were destitute.

It's been around for 70 years but was eliminated this year.

[vadawg]

16. looks like the old pension plan of having lots of kids and living with them was the best one

when i finally retire im gonna go were the living is cheap and the fish are biting....