In recent decades, private industry has gradually moved away from providing pensions for employees and the responsibility for preparing for life after constant labor has fallen to the individual.
Public employees remain as one of the few groups that have access to modest pensions, and resentment in the private sector now threatens those.
It has become almost a Hollywood cliché to recount stories about hostile takeovers of companies in order to raid well-funded pension plans, thereby leaving workers with pennies on the dollar for their earned benefit – and there have been a number of such occurrences. That is but one justification for getting out of the business of offering pensions since, apparently, loyalty to investors supersedes loyalty to those who actually produce the widgets.
However, more frequently, pension plans fail because management fails to make adequate annual contributions of deferred income, using that money as a sort of piggy bank to fund corporate interests. Public pension plans are all too familiar with that latter problem. Wherever you see underfunded public pension plans, failure to make actuarially required annual contributions is almost invariably the cause.
Pension funds, and the long-range institutional investment plans that grow them, are good for the economy. When economic bubbles burst, the buy-and-hold philosophies of long-term investors create an absolute bottom greater than zero and, thereby, stave off absolute disaster and contribute to economic stability.
Recipients of pensions also help stabilize the economy as they put dollars of deferred income back into the economy each and every month. Does anyone really believe that our economy could ever be improved by having more senior citizens become wards of the state?
In the bitterest of ironies for those accepting the challenge of preparing themselves for those so-called ‘golden years’, Congress is now seeking to eliminate the provisions for ‘pre-tax’ set-asides for personal retirement accounts to fund tax cuts for the über-wealthy. Unconscionable!
When individuals assume all the risk for their investments, it is too frequently small investors that bear the brunt of economic downturns. According to some estimates, the economic crisis of 2008 saw small investors lose $3.5 trillion – precisely the same amount gained by the folks who placed bets against the American economy. As the old saying goes, there ought to be a law.
A few months ago, newly-elected Congressman Greg Gianforte (R-Montana) actually proclaimed, out loud, that retirement is ‘wrong’ because it is not mentioned in the Bible. A public policy of ‘retire when you expire’ lacks the compassion and social justice of a civilized society.
Right wing ideologues have been known to ask, “Why should public employees receive a pension when private sector employees do not?”
That is absolutely the wrong question to ask.