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View Diary: $6.6 Trillion Retirement Savings Deficit Shows 401(k)'s No Replacement for Pensions (47 comments)

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  •  did pensions work? (4+ / 0-)
    Recommended by:
    Sparhawk, VClib, FG, cynndara

    they came into broad use in the '60s, and promptly started collapsing in the 80s and 90s when the first big wave of retirements hit.  so its not like pensions have some sterling track record.

    •  I'm fairly confident (17+ / 0-)

      that there are plenty of "Executive Pension Schemes" that are working just fine!

      "It's the rich, that gets the pleasures,
      It's the poor, that gets the blame,
      It's the same, the whole world over,
      Ain't it all, a fucking shame"

      I hope that the quality of debate will improve,
      but I fear we will remain Democrats.

      Who is twigg?

      by twigg on Fri Jan 25, 2013 at 05:17:44 PM PST

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      •  Re (0+ / 0-)

        There are too few executives to matter. Pension insolvencies happen because there are too many people.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Jan 25, 2013 at 10:02:29 PM PST

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        •  Not so sure. (1+ / 0-)
          Recommended by:

          One million a year is pretty much rock-bottom salary for an executive these days.  But one salary at $1 million is equal to 40 order clerks (doing the actual work) at $25K.  Now figure that most execs make at least 10 million.  Suddenly you have a 400-clerk call center.  So it looks to me like the money spent on one high-rolling executive is pretty much the entire operational cost of a reasonable-sized money-churner.  And all the execs do, is act as pimp and bully-boy for the company.  They Sell, they glad-hand, they Look Good In Public and they beat everyone below them bloody, psychologically speaking.

          It does give you some insight into what our society actually values, in a practical sense.  The abilities to lie and to dominate others are very well-recompensed.

    •  You're right. Corporations cannot be trusted (15+ / 0-)

      to deal with employee retirement plans. And individual earnings have been stagnant because corporations and owners kept all the benefits of productivity increases.

      The government is our last, best hope for a decent retirement for most Americans.

      look for my eSci diary series Thursday evening.

      by FishOutofWater on Fri Jan 25, 2013 at 05:26:17 PM PST

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    •  The collapses were due to (11+ / 0-)

      the Reagan administration reduced funding requirements.

      Not because there was anything wrong pensions.

      "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

      by nosleep4u on Fri Jan 25, 2013 at 06:42:53 PM PST

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      •  And also because (10+ / 0-)

        bankruptcy law changes (also under Reagan) made it easier to raid pension funds.

        "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

        by nosleep4u on Fri Jan 25, 2013 at 06:46:23 PM PST

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      •  The collapse was due to ERISA (3+ / 0-)
        Recommended by:
        Sunspots, Gemina13, Oh Mary Oh

        After the passage of ERISA in 1974, and the origination of the Pension Benefit Guarantee Corporation, major corporations didn't want the enhanced liability or the insurance payments. That was when the transition to 401K plans started.  

        "let's talk about that"

        by VClib on Fri Jan 25, 2013 at 06:51:47 PM PST

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        •  I'd love to hear more about this (2+ / 0-)
          Recommended by:
          Notreadytobenice, Gemina13

          I know ERISA was bad for health insurance, because it made self-insured plans (which many large companies' are, even if they are administered by an insurance company) not liable for damages for medical malpractice. But there's a lot I don't know about ERISA.

        •  Maybe they didn't want it (1+ / 0-)
          Recommended by:

          but it was 12 years of Republican rule that assured they didn't have to do it anyway.

          For the people, government exists to make sure that they do the right thing whether they want to or not.  Now, are corporations people or aren't they?

          •  cynndara - corporations had choices (0+ / 0-)

            To comply with the new ERISA rules as they applied to defined benefit programs or stop providing pensions and offer defined contribution (401K type) plans or no retirement plans at all. Most corporations over the next decade stopped their pension plans and transitioned to 401K programs. I don't think that members of Congress had any idea that the new law would kill pension plans, but it did. It was a very unintended consequence.

            I am not sure if you are just joking, but in case you aren't the SCOTUS has never declared that corporations are people and has been very clear between the differences of "natural persons" and groups of people like clubs, associations, unions, and corporations.

            "let's talk about that"

            by VClib on Sat Jan 26, 2013 at 12:15:17 PM PST

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            •  Ah, yes. (0+ / 0-)

              These things should come with a snark alert (TM).  But as for the corporations shifting over because they didn't like the terms of the law . . . first, the legal paperwork generally ran a hundred and fifty pages of boilerplate; it was my job to print those suckers out night shift at a law firm.  So smaller businesses might have been overwhelmed by the compliance requirements.  Still, the law could have been implemented with more controls.  Companies didn't HAVE to be allowed to weasle out of their commitments.  The government let them.

      •  Actually, just "Googled" ERISA, and as my Father (0+ / 0-)

        would say, "Here's a fine how-do-you-do."

        The ERISA bill was introduced by a Democrat from Pennsylvania, Rep John Dent.  It was signed into law by Gerald Ford.

        I'm rather skeptical of the "unintended consequences" defense, in most instances.  During my twenty plus years with the feds, I never say any policy proposed, much less implemented, unless every detail was scrutinized (and possible outcome).  Partly that was due to the "CYA" culture in the Dept of Defense.

        At any rate, IMO it is the responsibility of lawmakers to know full well the possible outcomes of their legislation (exceptions might be if a "9-11" type event actually affected the outcome, and it would have been impossible to have foreseen such an event).

        That's why they have expert staff, including but not limited to economists.  And if it's arguably not possible to know (within reason) the effect of such policies, "don't go there."

        I suspect that some of the time the PtB use the "unintended consequences" meme when they enact legislation that they KNOW would be wildly unpopular and/or harmful to large swaths of the American populace.

        At any rate, the situation needs to be fixed.  401K's are obviously no rational substitute for defined benefit plans.


        “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Sat Jan 26, 2013 at 01:12:49 PM PST

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