Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend  
Printer Friendly Page Save As Favorite Save As Favorite View Article Stats
8 comments

OpEdNews Op Eds

Retirees could face pension cuts under plan being considered by Congress

By (about the author)     Permalink       (Page 1 of 1 pages)
Related Topic(s): ; ; ; , Add Tags Add to My Group(s)

Must Read 2   Interesting 1   Inspiring 1  
View Ratings | Rate It

Headlined to H3 10/22/13
Become a Fan
  (6 fans)

opednews.com

See original at Daily Kos

by Laura Clawson



This should not be what retirement looks like.
(Attribution: Dreamstime)

For decades, the corporate answer to retirement security has been to cut pensions wherever possible. In recent years, states have gotten into the game, with Republican governors and legislators -- and more than a few Democrats -- attacking public worker pensions. Because after all, the private sector has already kicked as many people as possible out of pension plans, so wouldn't it be greedy of public workers not to follow private sector workers into retirement poverty? Now, Congress may be getting into the act, expanding the already vast range of ways existing pensions can come under attack:
"The proposal, which hasn't been made public yet, would give trustees of multi-employer pension plans the discretion to cut guaranteed benefits, so long as those cuts were done as 'early corrective actions' to financially troubled plans. While corporations in the past have been able to wiggle out of guarantees for future retirees, the promises to current retirees have generally been untouchable."
Multi-employer pension plans do face a deficit, but:
"Several structural factors are driving that deficit upwards. The national trend of de-unionization coupled with job losses from the recession have meant that fewer and fewer workers are paying into funds as more and more retirees are starting to receive benefits. Employers also have an incentive to drop out of these pools when they can afford to do so -- paying an exit fee has often proven more enticing than staying on the hook for owed benefits. Furthermore, like other pensions across the country, multi-employer plans were ravaged by the Wall Street-driven economic meltdown of 2008. While about 75 percent of multi-employer plans were considered financially healthy at the beginning of 2008, according to government criteria, only 30 percent were considered to be so by the start of 2009.

"But many plans have since improved -- 60 percent are once again stable, and only about 25 percent, many of them relatively small funds, are in critical status. In fact, it's two large pension funds in particular -- the 410,000-participant Central States Fund and an 118,000-member United Mine Workers of America fund -- that are responsible for much of the funding crisis. Together, they make up about 5 percent of all workers covered by multi-employer plans and about $26 billion of the $27 billion in liabilities of plans projected to go insolvent, according to the PBGC."

One thing that often drops out of the hype on troubled pensions is that personal retirement accounts like 401(k) plans are in as much trouble or more. According to economist Teresa Ghilarducci, "Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts," but "To maintain living standards into old age we need roughly 20 times our annual income in financial wealth." 

Suffice it to say, $30,000 is not 20 times most people's annual income. Continuing to attack pensions and thereby promoting these vastly inadequate personal accounts that are speeding the U.S. toward a generation of elders living in dire poverty, is a disaster waiting to happen. Unfortunately, if Congress weakens pensions, the disaster may not have to wait that long.

 

articles reprinted from Dailykos.com
Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Rush Limbaugh's Sponsor List

Comcast favors Fox News, charges $204 more for MSNBC package. ACTION NEEDED

Ron Paul takes lead In Iowa, Newt Gingrich falls off cliff

Busted: Scott Walker fell for Prankster posing as David Koch

Meet Foster Friess, Billionaire who Bought Iowa for Santorum

The Bundy Ranch flashpoint, one Nevadan's perspective

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
7 people are discussing this page, with 8 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

Welcome to Greece.... by 911TRUTH on Wednesday, Oct 23, 2013 at 12:38:50 AM
Pensions at their current levels for payments are ... by Doc McCoy on Wednesday, Oct 23, 2013 at 1:38:36 AM
I am always wondering when Codger suggests or supp... by Mark Sashine on Wednesday, Oct 23, 2013 at 7:17:15 AM
The first thought that came to me for those having... by Michael Dewey on Wednesday, Oct 23, 2013 at 8:27:11 AM
How much greed can you stuff down the greedy gulle... by kappie on Wednesday, Oct 23, 2013 at 9:50:08 AM
The lady pictured serving coffee will be one of th... by Marlys Thoreen on Wednesday, Oct 23, 2013 at 3:02:41 PM
An Alternative to Capitalism (since we cannot... by John Steinsvold on Wednesday, Oct 23, 2013 at 9:41:38 PM
Page Not Found - 404 Error Page The page you ar... by Doc McCoy on Wednesday, Oct 23, 2013 at 10:48:09 PM