Only 25 years ago, 60 percent of full-time workers at large and medium-sized companies had pension plans with lifetime benefits. Now, less than 25 percent of private-sector workers can still count on retirement security.
Around 20 million public employees and educators still have traditional pensions. But these plans are under attack by the Koch brothers’ Americans for Prosperity, the Enron billionaires Laura and John Arnold Foundation, and the anti-worker American Legislative Exchange Council. Their goal: turn these pension funds into individual 401(k) accounts.
Wall Street Wins, Main Street Loses. It’s a win-win for everyone but working Americans, whose average savings are only one-fifteenth of what they’ll need for retirement. Big Business shifts the risks and responsibilities to their employees. And, as Boston University law professor David Webber explains, Wall Street makes easy money managing the 401(k)s.
Easily Exploited. Webber writes that 401(k) investors, including himself:
- Pay high fees “that we do not understand.”
- Accept low returns, under-performing Standard & Poor’s 500-stock average.
- Don’t sue unethical banks like Wells Fargo.
Workers Need Pension Funds. While Wall Street says retirement funds are in crisis, 49 states have made pensions more solvent. These funds provide reliable benefits, and:
- They have the clout with Wall Street to insist on lower fees and higher returns.
- They conduct shareholder lawsuits against corporate scofflaws like Enron, Worldcom and Wells Fargo.
- As do unions, they offer workers a voice on issues like exorbitant CEO salaries. As Webber writes, Wall Street’s war on pensions is “economic voter suppression.”
If you worked for a company for 20 or 30 years, you used to expect a secure and livable pension.
Now that dream is dying for most private-sector workers.
Only 25 years ago, at large and medium-sized companies, about 60 percent of fulltime workers had pension plans. Now, only about a quarter can count on retirement security.
There’s been a big shift from traditional “defined benefit” plans, with guaranteed incomes for retirees, to “defined contribution” plans, such as 401(k)s, which require workers to risk their retirements on the roller-coaster of Wall Street, without any guaranteed benefits.
Working Americans and retirees are suffering from the decline in good-paying, full-time, union-represented jobs. Even now, 90 percent of union workers participate in some kind of retirement plan, compared to 75 percent of unrepresented workers. And 74 percent of union workers — but only 15 percent of unrepresented employee — enjoy “defined benefit” plans.
A study of 998 workers who were laid off from the shuttered McDonnell Douglas plant in Tulsa, OK, found most had to work at low-wage, often back-breaking jobs, well-past retirement age, often buried by debts. One 79-year-old man with spinal disease still works full-time as a “greeter” at Wal-Mart.
Fighting for Social Security & Medicare
When planning retirement, working Americans used to rely on a “three-legged stool”: employer pensions, their own savings and Social Security.
Now, all three legs are shaky: Private-sector pensions are dwindling. Meanwhile, almost half of all families with working-age adults don’t have any retirement savings.
That’s why, without Social Security benefits, more than 22 million older Americans would plunge into poverty. And Social Security benefits are bare-bones at best, averaging only about $1,360 a month — $16,300 a year.
With the Trump tax cuts for big business and the super-rich adding at least $1 trillion to the federal deficit, Congressional Republicans are threatening to slash Social Security and Medicare.
We can’t let them cut the last lifeline for Americans who have worked hard and deserve dignified retirements.