Read this new study. It’s chilling.
And thanks, Kimberley, for the link.
I’m not surprised. It sucks.
More data on the state of American retirement from EPI here. Not a pretty picture for anybody, really. But women and single people face particular challenges.
I’ll have to dig into the full report, but in the NIRS list of recommendations it proposes “Expanding defined benefit pension plans.” That’s going to take some serious work and serious national legislation to incentivize a reverse in the the national trend away from DB plans in the private sector. A trend that has been supported by our government even to the point of providing cover for both private and public sector entities to dismantle or restructure defined benefit pension plans already in place and funded in good faith, over decades, by employees. (This doesn’t make me very confident about States getting into the retirement business, either.)
In addition, DB plans need to be structured in such a way as to guarantee participants adequate economic security down the road. EPI
Exacerbating the decline in coverage is the fact that even workers fortunate enough to participate in a defined benefit plan are increasingly likely to be in a hybrid cash balance plan that has features in common with both pensions and 401(k)s. By 2010, 36 percent of participants in private-sector defined benefit plans were enrolled in cash balance plans, and another 3 percent were in other non-traditional plans. Cash balance plans usually provide less security than traditional pensions because the value of the benefit isn’t known in advance but rather depends on the interest applied to account balances. In addition, most cash balance plans allow benefits to be taken in lump sums rather than annuities, so retirees may outlive their savings; and fewer have disability provisions.
In our “New Economy,” where workers will rarely stay with one employer long enough to be able to fully participate in either a sponsored DB or DC plan, improving and expanding our national Social Security system seems the only viable alternative to the increasing threat of poverty faced by our senior population. (A Single Payer healthcare system would aid that effort immeasurably. But that’s another topic. Sort of.)
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