POLITICS - Phasing Out of Pensions

I watched an interesting segment on PBS's "The NewsHour" the other night.

It includes a section on "Analyzing pension changes" which was a discussion with Karen Friedman, policy director for the Pension Rights Center, an employee and retiree advocacy group; and James Klein, president of the American Benefits Council which considers pensions from the employers' point of view.

Well, part of it is a reflection of the changing nature of the employer, employee relationship and it is just one manifestation of that. Another aspect of it is it has become increasingly more difficult to sponsor these plans.

There is, I have a lot of member companies who tell us, you know, we sponsor a pension plan; we expect it to be a very expensive proposition. We don't have a problem with that. What we do have a problem with is the unpredictability of not knowing what the new rules are going to be with respect to funding and other things of that nature.

Klein

Anyone who has had a job in the last 10yrs knows that old-style pension plans (such as IBM's) are going away and the 401k plans are taking their place, but there's a problem.

And so while 401(k) plans are good as supplemental plans, they were never meant to be the whole plan that people used to save for retirement. So what we are seeing is over the last ten to twenty years a gradual move or gradual shift from these good traditional pensions that provide employer-paid benefits, that employ a guarantee stream of income to this do-it-yourself society.

Well, at the same time that's happening we are asking people to save more for their retirement, we are asking them to save for their education. We are asking them to save for health care. How much can individuals save? Right now just to put this into perspective, the median account balance of 401(k)plans in this country is $15,000. And the median account balance for those between 55 and 65 is only $23,000.

Friedman

In other words, just how much can the average low to middle income family have to save in a year for everything the Republicans and business want in this "do it yourself" society? With all the monthly living expenses (home, utilities, food, cloths, children, etc.) how much is actually left to put into all the programs they expect families to save for? Not much, if any. There's the Catch-22.

Republicans: Another example of favoring the rich. Sure, if you are rich you can afford to save to these programs. No problem. I recognize that this is why people want to be rich, but do we want a society that does not provide a level playing field for everyone?

Business: Lets face it, Wallstreet worships at the shrine of greed. Anything to gain ever bigger profits. This is the essence of greed, never being satisfied with just making a profit, but that you must have bigger profits every period (quarter, semiannually, yearly). It's not the little orphan asking, "Can I have more, please?" for porridge; it is the big, fat orphanage board member, with his table overflowing with food, saying, "I want more Prim Rib, lets cut the orphan's ration in half so we can buy more." Reminder, greed is one of the "7 deadly sins."

What we, as a society, have to decide is; just what do we want the USA to be. A society which has no responsibility to the "little" guy but has a big responsibility to protect the "big" guy? Or a society that protects both equally?

You decide, then take whatever action you deem necessary to make the USA the society you want. Just remember, you're not the only citizen, and all citizens have the right to petition the government (local, state, federal) to execute their wishes.