Bushites to US Current and Future Retirees: You're On Your Own
With the economy in recession or heading there, jobs continuing to be offshored, regular working Americans keep taking it on the chin. They have been struggling to keep their heads above water since King George took office and launched his destructive presidency.
Stagnant and lower wages and unaffordable health care have become the norm under Republicans. Defined pensions are going the way of the dinosaur thanks to Dubya the Shrub and his corporate cronies.
The attack on workers' pensions has been going on for a few decades, beginning under another always-help-the-wealthy Republican president, Ronald Reagan, but has accelerated under the Bushites.
According to LaborNotes, "There were 95,000 such plans in 1980; it was down to 85,000 in 1993, and fell to less than 27,000 in 2005. Today only 21 percent of the workforce is covered by defined benefit pensions–the most secure type of employment-based retirement plan."
Add to that, as reported in WorkplaceFairness, "...more than one-half of employers who provide pension benefits report changes and cuts in 2004 in those plans." Which means that many hard working Americans will have to work into their seventies and eighties because pensions have been cut or eliminated.
WorkplaceFairness also notes that workers' pensions have been and are lost because of corporate rip-offs of workers' pensions due to corporate malfeasance, like Enron, WorldCom, Lucent, etc; pension plans severely underfunded; and conversion of traditional pension plans to cash balance plans.
In 2006, the Republican controlled Congress passed the Pension Protection Act, which, like all Republican named legislation, does the exact opposite of what it says, e.g. Clean Air Act, Healthy Forests, etc.
As Al Hart writes in Labor Notes, " ''Congress did working people no favor last year when it passed the so-called “Pension Protection Act.' Far from protecting any pension, this legislation makes things worse. Its rules governing pensions create new incentives for employers to dump their plans."
And Economic Policy Institute reports, "Congress has encouraged employers to replace traditional pension plans with individual account plans, shifting both the risk of investment loss and the cost of saving for retirement from the employer to the individual worker. A real pension guarantees a steady stream of income to retired workers—it does not shift risk onto individuals who may not be able to adequately manage it."
Which is exactly what Bush, his corporate cronies, Republican lackeys on Capitol Hill and other Republican toadies wanted: to push the 401k plans for employees. Why?
According to EPI, "A 401(k) plan or IRA guarantees nothing. They are, however, cheaper for employers, and they generate tremendous fees and profits for Wall Street and financial firms. They also particularly benefit the well-off. So it's easy to see how they have achieved a measure of political success. But 401(k)s do precious little for the average worker. After 20 years of experience we can say with confidence that 401(k) plans have not built broadly shared retirement security, but instead eroded it. The nation is richer than it was 20 years ago, yet Americans nearing retirement are less prepared than they were a generation ago, and the future looks even dimmer."
And LaborNotes concurs, "On average, employers put into 401(k)s about one-quarter of what they would contribute to a defined benefit pension."
EPI states, "The conservative "you're on your own" philosophy—what we call "yo-yo economics"—has accelerated the decline of traditional pension plans..."
What about the Bush vaunted 401(k) plan? According to Marie Cocco's in her article, "The 401(k) Myth:"
"In the 1980s and, especially, the go-go 1990s, the 401(k) was the wondrous new invention that was supposed to make assembly-line workers capable of becoming rich, in retirement, through their own industriousness and, lest we forget, the magic of the stock market. The myth began to fade amid Wall Street’s uncertainty during the past decade. It should be buried—deeply—with the latest Government Accountability Office report on the savings plans that have become the primary form of pensions available to that half of the private work force that has any pension at all.
"Projecting retirement savings based on those currently participating in 401(k)-style plans, the GAO found that the youngest workers—those who’ve been told from the start that their jobs would provide no traditional, fixed-benefit pensions of the sort that their grandparents or parents might rely on—face the prospect of paltry incomes in old age. More than a third of those born in 1990 could be predicted to have no savings at all in retirement, the GAO found. Among the lowest-income workers, 63 percent would have no savings in their plans when they retire.
"What about more diligent savers? Overall, the GAO found that as a group these retirees would have an average income of about $18,784 a year, or just over $1,500 a month. Among the highest-income workers, a fund balance that is used exclusively for monthly income—not for extravagant extras—would be $50,098 a year."
A Boston College Center for Retirement Research report via AFL-CIO blog showed that 401(k)s and IRAs underperformed traditional pension plans and returned less on investments than pension investments.
When it comes to pensions, Bush, his Bushite Republicans, their corporate cronies, and Wall Street just love 401(k)s and try to eliminate defined pensions. More money for them. For regular working Americans: you're on your own.
Stagnant and lower wages and unaffordable health care have become the norm under Republicans. Defined pensions are going the way of the dinosaur thanks to Dubya the Shrub and his corporate cronies.
The attack on workers' pensions has been going on for a few decades, beginning under another always-help-the-wealthy Republican president, Ronald Reagan, but has accelerated under the Bushites.
According to LaborNotes, "There were 95,000 such plans in 1980; it was down to 85,000 in 1993, and fell to less than 27,000 in 2005. Today only 21 percent of the workforce is covered by defined benefit pensions–the most secure type of employment-based retirement plan."
Add to that, as reported in WorkplaceFairness, "...more than one-half of employers who provide pension benefits report changes and cuts in 2004 in those plans." Which means that many hard working Americans will have to work into their seventies and eighties because pensions have been cut or eliminated.
WorkplaceFairness also notes that workers' pensions have been and are lost because of corporate rip-offs of workers' pensions due to corporate malfeasance, like Enron, WorldCom, Lucent, etc; pension plans severely underfunded; and conversion of traditional pension plans to cash balance plans.
In 2006, the Republican controlled Congress passed the Pension Protection Act, which, like all Republican named legislation, does the exact opposite of what it says, e.g. Clean Air Act, Healthy Forests, etc.
As Al Hart writes in Labor Notes, " ''Congress did working people no favor last year when it passed the so-called “Pension Protection Act.' Far from protecting any pension, this legislation makes things worse. Its rules governing pensions create new incentives for employers to dump their plans."
And Economic Policy Institute reports, "Congress has encouraged employers to replace traditional pension plans with individual account plans, shifting both the risk of investment loss and the cost of saving for retirement from the employer to the individual worker. A real pension guarantees a steady stream of income to retired workers—it does not shift risk onto individuals who may not be able to adequately manage it."
Which is exactly what Bush, his corporate cronies, Republican lackeys on Capitol Hill and other Republican toadies wanted: to push the 401k plans for employees. Why?
According to EPI, "A 401(k) plan or IRA guarantees nothing. They are, however, cheaper for employers, and they generate tremendous fees and profits for Wall Street and financial firms. They also particularly benefit the well-off. So it's easy to see how they have achieved a measure of political success. But 401(k)s do precious little for the average worker. After 20 years of experience we can say with confidence that 401(k) plans have not built broadly shared retirement security, but instead eroded it. The nation is richer than it was 20 years ago, yet Americans nearing retirement are less prepared than they were a generation ago, and the future looks even dimmer."
And LaborNotes concurs, "On average, employers put into 401(k)s about one-quarter of what they would contribute to a defined benefit pension."
EPI states, "The conservative "you're on your own" philosophy—what we call "yo-yo economics"—has accelerated the decline of traditional pension plans..."
What about the Bush vaunted 401(k) plan? According to Marie Cocco's in her article, "The 401(k) Myth:"
"In the 1980s and, especially, the go-go 1990s, the 401(k) was the wondrous new invention that was supposed to make assembly-line workers capable of becoming rich, in retirement, through their own industriousness and, lest we forget, the magic of the stock market. The myth began to fade amid Wall Street’s uncertainty during the past decade. It should be buried—deeply—with the latest Government Accountability Office report on the savings plans that have become the primary form of pensions available to that half of the private work force that has any pension at all.
"Projecting retirement savings based on those currently participating in 401(k)-style plans, the GAO found that the youngest workers—those who’ve been told from the start that their jobs would provide no traditional, fixed-benefit pensions of the sort that their grandparents or parents might rely on—face the prospect of paltry incomes in old age. More than a third of those born in 1990 could be predicted to have no savings at all in retirement, the GAO found. Among the lowest-income workers, 63 percent would have no savings in their plans when they retire.
"What about more diligent savers? Overall, the GAO found that as a group these retirees would have an average income of about $18,784 a year, or just over $1,500 a month. Among the highest-income workers, a fund balance that is used exclusively for monthly income—not for extravagant extras—would be $50,098 a year."
A Boston College Center for Retirement Research report via AFL-CIO blog showed that 401(k)s and IRAs underperformed traditional pension plans and returned less on investments than pension investments.
When it comes to pensions, Bush, his Bushite Republicans, their corporate cronies, and Wall Street just love 401(k)s and try to eliminate defined pensions. More money for them. For regular working Americans: you're on your own.
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