Where did all our pensions go?
WASHINGTON - A total of 84,350 pension plans have vanished since 1985. This figure shocked Pulitzer Prize-winning authors Donald L. Barlett and James W. Steele, who just released their latest book, "The Betrayal of the American Dream."
Their chapter on retirement chronicles the heist of the American Dream's secure retirement by the financial elite and is a very important section of the book, said Steele, who spoke with the AFL-CIO about the retirement crisis.
Steele said there is another number we should pay attention to: $17,686. That's the median value of 401(k) accounts in 2011. For most working people, the amount in their 401(k) account would pay them less than $80 a month for life.
"What's happening with retirement is almost parallel to what you see happening in other parts of the economy," he said.
“The elite has its agenda to eliminate pensions with the shift to 401(k)s, which cost companies less,” he noted. “Now, there's a revenue stream for Wall Street and an obligation shift to people with little or no experience understanding how to deal with their own retirement issues....This is typical of all the other things the economy elite has been doing for decades with deregulation, unrestricted free trade and tax cuts—these things are all related.
"In the '50s, '60s and '70s, the amount of workers with access to pensions was significantly rising," said Steele. "We fully underestimated the speed in which the downturn would occur, and how Congress went along and encouraged it."
Barlett and Steele write that the shift from defined-benefit pension plans to 401(k)s began in the 1980s. Companies realized 401(k)s would substantially reduce corporate costs. Workers were told that pensions no longer made sense and were outdated since people moved around from job to job. The 401(k) was marketed as more “portable.”
Steele said 401(k)s were engineered by corporations as another way for the wealthy executives to set aside money. They were never intended to be a principal retirement plan, only a supplement.
"Once corporate America got on to this, the idea took root," he said. "The entire obligation shifted to the employees."
Congress ignored the concerns raised by trade unions and other pension rights organizations. And the consequences are dire for middle- and lower-income workers.
"This is so typical of what has been happening over the last two to three decades," said Steele. "This is the slow, steady erosion of economic security Americans had (or thought they had)....Now economic pundits, corporate folks and Wall Street people are saying people just have to work longer, in part because retirement plans now in place will not provide much security to people as they get older."
Barlett and Steele feature stories of average people who did everything right (saved, worked hard) but are still living on the edge of poverty because of policies that enhance the rich at the expense of everyone else.
“Over and over again, people thought they had something good. They were working hard and then, through no fault of their own, lost it all. Most people we talked to in the book are employed,” Steele said.
“People thought it was something they had done to lose their job or benefits....They didn’t realize it was part of a broader pattern. There are great swaths of working people who are affected and we think it's our fault. For most of these people, it's not their fault, it's just the way policy has been organized. Systematically dismantling pensions and retirement is the perfect example.”
With the decline of pensions, it's even more important to strengthen, not cut, Social Security benefits. Although the country dodged a bullet in 2005, when Bush's plan for Social Security privatization fizzled, Steele said we still need to be vigilant to protect our benefits from the Wall Street casino.
“Don and I make this point that the 2008 recession wouldn't look a whole lot different from the Great Depression if we didn't have Social Security and Medicare because there was no safety net then,” he said.
The economic elite, said Steele, attack Social Security because it's a large pool of money for Wall Street to play with.
“Nobody should kid themselves that they're not going to come back and try to implement some parts of that [privatization]....The amount of money at stake is too good and that’s all they care about — access to that money, not American workers.”
- Yes, that is why they want to pretend that the system is "broken," or that you should work until you are 80 (and drop dead before you can claim it). They will repeat that over and over until everyone is brainwashed and believes it.
They simply want to steal your money.
- Exactly r2
- ...long time passing.
- [quote] A total of 84,350 pension plans have vanished since 1985.
Sadly, that doesn't take into consideration the decline in the quality of the plans that remain.
Even if you still have a pension it probably isn't as generous as the one the company offered a generation ago, and it's almost guaranteed that the health care component isn't as good.
- IRA's are great! I have 100 million dollars in mine, so don't tell me they don't work.
- I wish all right-wingers and corporatists would drop dead twice.
- Lol at r7
And I agree
- I want to know where did all the cowboys go
- George Carlin said it back in 2005. Wise man.
- "Where did all our pensions go?" sounds like a Peter, Paul and Mary song.
- The Rmoneys and the Koch suckers know exactly where all our pension money is...in their offshore non-American no-tax-paying bank accounts. God bless Amerika!
- Excellent R10 and sadly spot on.
- My dad gets a railroad pension, as does my mom just for being a railroad wife (she earned it)!
- There is a huge scam going on with RR pensions. The workers do everything they can to get out on disability. They then get a very generous RR pension on top of that. Many are hauling in over $100k/yr for doing nothing.
LIRR workers are notorious for pulling this shit.
- It's called a pension, shitwad at R16. Romney stole money from people and has it hidden overseas. Now that's a scam.
- Interesting article containing some related info on an interesting blog.
- Greed and corruption come in many forms, R17.
Inform yourself before you call someone a shitwad. Better yet, grow up.
- A fair number of pensions have also been raided by people following the legal-larceny practices of Mitt Romney.
Billions and billions of dollars set aside for workers' retirements--gone.
- People do occasionally become disabled in their later years but before retirement age, r16. Would you prefer that they go bankrupt and lose their homes?
- I recall when IRAs became generally available in the early 1980s, they were touted as something wonderful and that anyone who participated and contributed his/her $2000/year would be a millionaire by the time they retire. So much republican fucking around has fucked it up for so many people in the intervening time since then and I am far from being a millionaire plus my tiny pension of $200/month is in danger because the fund is in the red.
- The Stock Market experts (you are probably not 'the house' there) see you coming, baby.
401K seemed so safe, but who came up with them? Why did the suddenly become so universal?
They put everybody's pension lumps into one mattress: the Stock Market. How is that smart for the investor?
Historically, crooks go after pension funds. It's too irresistible a pool of money.
Lots of ways it's been done. List them? Too tired now, but I will mention bundling of good debt with bad, resold as one product. Also, good ol' American 'bait and switch', and JP Morgan's big favorite, stock dilution. Or during Carter's time, when interest rates skyrocketed and everyone bought annuities at 18% and, surprise, once the instruments were written, the issuers went out of business and sold off the business to other insurers, who reissued the annuities at a fraction of the previous interest rate. Savings and Loans? Systematic issuance of bad loans all over (Bushes involved there to), an organized crime. Loans defaulted, taxpayers bilked of one trillion 1988 dollars.
Romney is Bush, he will conduct the next harvest of workers (Suckers) life savings, perhaps through privatization of Social Security, getting that money into play in the private sector (the shark pool).
- THANK GOD I NEVER PUT ANYTHING AWAY!!!!