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.”