Pension Meltdown
America's Pension System is Failing Those Who Need it Most
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  • Amadeus 48

    The Via Meadia team needs to sharpen its thinking on 401(k) plans. The fact that pre-tax wage or salary dollars can be invested–often with at least a partial employer contribution match– and tax deferred is a good thing for everyone who participates, if we are concerned about Americans supplementing Social Security payments in retirement. What difference does it make that more affluent people with higher tax rates are able to participate? There are limits on annual 401(k) contributions, so it isn’t an unlimited tax deferral. Also, employer matches give the employee an immediate investment return on annual contributions.
    One organization I work with contributes 3% of pay to employees’ 401(k) accounts and then matches up to an additional 3% if the employee also contributes, so the employees in effect get an immediate 50% return on their contributions. If an employee leaves, his 401(k) account goes with him.
    In a republic of self-reliant citizens, this is a pretty good program. In a nation of sheep waiting to be fed, watered, and sheared, it would perhaps lack appeal.

  • Anthony

    These are policy issues requiring both informed and organized constituencies. On one level The Feed conflates retirement, employment, investment/speculation, health provision, and program inadequacy; on yet another, the problems enunciated have no solution in sight despite societal importance.

  • Hubbub

    “We need the kind of reforms that can reduce costs while improving quality, bringing technology and competition to bear.” We already have that – it’s called ObamaCare – We do not need ObamaAid or ObamaFund or ObamaSecurity or ObamaDependence or the myriad other programs designed to save us from ourselves at the cost of our souls.

    “Creating a stronger regulatory framework for the administration of these
    plans will help ensure that worker savings grow and are sheltered from
    risks without being burdened with high fees.”

    By all means, lets create another ‘regulatory framework’, for we cannot regulate enough to ‘ensure that worker savings grow and are sheltered from risks with being burdened with high fees.’ Sounds like something straight out of government-speak when it’s ready to slap you up-side the head with more burdensome rules, regulations, and set-asides. Don’t we have enough of this already – your can’t reduce the size of government if you are constantly adding new elements to it.

  • Andrew Allison

    VM needs to sharpen up its thinking about pension plans, period! Medicare is not a pension plan: it’s a single payer health insurance plan for seniors which, like all such, provides for additional private insurance for those who want it. While there are clearly actuarial problems with both Social Security and Medicare, neither is in anything like the mess that Public Employee plans are. Furthermore, 401(k) and other vehicles for the better-off to provide for their retirement are just fine.

    VM has fallen into the entitlement trap. The purpose of Social Security (and MedicAid) is not to keep low-income workers in the manner in which they would like to become accustomed, but to keep them out of poverty. The problem is exactly the same as that raised by the heathcare debate namely what, if any, is the minimum level of support owed to every member of society. In the case of Social Security, that might be a minimum payment regardless of contributions.

  • Corlyss

    Can’t have both an economy 70% dependent on consumer goods and a population with a savings rate that provides for anticipated old age and unanticipated illnesses. It’s like the administration saying they are going to dock Medicare $500 billion and call it savings, and then they are going to take that money and apply it to expanding the pool of insureds.

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