I hope I can quit working in a few years: A preview of the U.S. without pensions

[n2doc]

TULSA — Tom Coomer has retired twice: once when he was 65, and then several years ago. Each time he realized that with just a Social Security check, “You can hardly make it these days.”

So here he is at 79, working full time at Walmart. During each eight-hour shift, he stands at the store entrance greeting customers, telling a joke and fetching a “buggy.” Or he is stationed at the exit, checking receipts and the shoppers that trip the theft alarm.

“As long as I sit down for about 10 minutes every hour or two, I’m fine,” he said during a break. Diagnosed with spinal stenosis in his back, he recently forwarded a doctor’s note to managers. “They got me a stool.”

The way major U.S. companies provide for retiring workers has been shifting for about three decades, with more dropping traditional pensions every year. The first full generation of workers to retire since this turn offers a sobering preview of a labor force more and more dependent on their own savings for retirement.

more

https://www.washingtonpost.com/business/economy/i-hope-i-can-quit-working-in-a-few-years-a-preview-of-the-us-without-pensions/2017/12/22/5cc9fdf6-cf09-11e7-81bc-c55a220c8cbe_story.html

Just the way the 1% want it- work until you can't, then die.

[MichMan]

1. How did they lose their pensions?

The article confuses me. While the employees lost their jobs when the plant closed, they still should have earned a pension for the years they had been there as long as they were vested.

It makes it sound like unless the workers at McDonnel Douglas worked the full 30 years they weren't eligible for any pension at all. I never heard of anything like this before and it doesn't make any sense.

If that was the case, they would have been way better off having a 401K.

[n2doc]

7. Working for a set time is common in the education industry

For example, in the University of Georgia system you have to work for a minimum of 25 years before you can get a pension. One can buy in if one is close, though.

[MichMan]

8. They worked in an aircraft manufacturing plant

Having to work 25 years before being vested doesn't sound like a good deal. I would rather have a 401k with a match instead

[n2doc]

10. I don't know the details

But clearly there is a reason why the person interviewed in the article doesn't have a pension

[CTyankee]

12. Lots of workers would opt for a 401k match but they just don't have the means to do so.

They are paycheck to paycheck workers to begin with.

I worked in nonprofits and was married and had a spouse that was working so I could go the 401k route. But many if not most of my co-workers could not. I remember the disdain some people held for those who couldn't take a dime out of their paychecks to save for retirement. It was a problem and caused some trouble with employee morale.

[klook]

32. Yes.

The privileged have plenty of shame and blame to go around for those who were "too foolish" to invest in a 401(k) or IRA. Thanks to the demise of pensions and other defined-benefit plans for most workers, their financial prospects for the retirement years are bleak in many cases.

I was a paycheck-to-paycheck worker for many many years until in my 40s I finally started making enough income that my wife and I didn't have to worry about how to pay the bills AND keep a roof over our heads. I had retirement accounts but could only invest a sliver of my income after covering essentials.

In my 50s I finally started earning a decent wage and making significant progress in my retirement accounts. The 2008 crash dealt a major blow to my balances, but I didn't bail on the stock-heavy funds and stepped up investments significantly the past few years. Only because of the Obama recovery (and the good fortune of having good-paying, though boring, jobs the past 20 years) am I able to consider retiring now that I'm in my 60s.

If Republicans had their way, every single American worker's retirement would be subject to the ups and downs of the stock market, and those unable to spare enough to participate (or unlucky enough to have a boom market in the years leading up to retirement age) would be left out in the cold.

It's no secret that most Americans are under-prepared for retirement. As Teresa Ghilarducci suggests, we need a system that encourages and secures retirement savings if we're ever going to dig out of this crisis.

[dawg day]

33. I never worked anywhere that offered a pension plan until recently-

and I worked there 6 years before I was allowed to opt in to the retirement program (I was classified, basically, as "temporary" <G&gt , so now I won't be vested until 10 years in the program. (I contribute 7%, and the company matches it, but it's an actual pension, not 401k, somehow.) So I'll get to retire at 69, at which point I'll get, wait for it, $400 a month.

One good change is that after "full retirement age" (66), I'll be able to get full benefits AND earn income from work (since I won't be retiring anyway, LOL). Let's hope the health holds up.

When I think of the pensions my parents got-- they were able to retire at 63 with almost no loss of income-- well, oh well.

Thank FDR for Social Security, limited as it is. For people like me, who have worked for 50 years but in jobs without pensions, it's a real lifesaver.

(Not to mention it, unlike pensions, goes from job to job, so a layoff doesn't mean you lose it.)

[CTyankee]

37. It was unhappy for me that my brother (who was co-inheritor of my parents' estate)

died before my mother. If I hadn't then inherited the full amount of my parents' estate, I would not have been able to retire. What a sad thing it was, too. My mother was still alive when my brother died and she was devastated. I was glad he had been in good enough health to attend my daughter's wedding and I cherish the memories/photos of that wedding with him. I lost a dear sister in law who was also at that wedding a few years later. It was one of the happiest days of my life. My brother and my sister in law (ex husband's sister) danced together at the wedding and I still mist up a bit when I see a photo of it...

[shanti]

17. It takes much less than that to be vested

I have a full pension from the state of CA after 21 years, but I was vested after five years.

[NotASurfer]

11. I remember some unions bargained pensions away

Retirees weren't union members any more and management used fear of unemployment as leverage. I think that was 1990s so so timeframe roughly fits.

Not that I know that was the case here, I remember it and remember thinking how my grandmother relied on her husband's pension when he died. And I felt cold fury at those negotiators

[maxrandb]

14. That's the wrong question

The real question is "How did the 1% get American workers to freely give away their pensions... and convince them to vote for an asshat party so everyone else's would be taken away too"?

[MiniMe]

16. A lot of places don't offer pensions anymore. That has been since the 80's

Reagan put 401K's in, and companies stopped offering pensions as a benefit. Not all companies, but a lot of them.

[former9thward]

29. 401k's came in with the 1978 Revenue Act.

Which was Carter. https://www.learnvest.com/knowledge-center/your-401k-when-it-was-invented-and-why/

[MiniMe]

34. Interesting read, but looking at the timeline at the link,

The IRS didn't have any rules on funding the plan through payroll contributions until 1981, and only huge corps used it. That may be why I associate it more with Reagan than Carter.

[spooky3]

18. I agree; used to work in pension industry

And the story isn’t complete. Unless it was a union negotiated plan or state-local plan, someone with 10 years or more experience would have been fully vested. If the company failed to make full contributions, the participants still would have gotten something, and the PBGC would have covered some of the missing $. Today you need even less service to be eligible and to be vested.

[sarah FAILIN]

22. In cases of bankruptcy

Can't an employer default on pensions? Seems like I've heard this before.

[spooky3]

24. Employers can under some circumstances terminate

plans with DOL and IRS approval. But all participants would be immediately vested.

Deep into the article there is a paragraph that explains that employees did get some benefits but the amounts were a lot lower than if they could have continued to work there until retirement. That’s correct for DB plans. But someone who had been there for 29 years should have had a lot more than $300 per month. It makes me wonder if they were given an option to take a one time chunk as a distribution, and they chose to do that years ago but spent it while unemployed, for example. In any case the writer could have clarified this.

[dawg day]

35. Republic Steel did:

From 1986--
LTV Corp., the nation`s second largest steelmaker, said Friday it must terminate pension plans covering its steel unit`s salaried and hourly workers ``to successfully reorganize`` under Chapter 11 of the federal Bankruptcy Code.

The pension agency took over the responsibility, but was already deep in deficit at that point. And of course, that's taxpayer money that we paid to get the corporation off the hook.

[PoindexterOglethorpe]

19. I was puzzled by the guy working 29 years and then no pension.

Some time in the 1970's federal law required that employees be vested at 5 years. Or maybe it was originally at 10 years and then lowered to 5.

It feels as if something is missing in the story, although those old people needing to work because of disappearing or shrinking pensions is pretty true.

[Hekate]

23. Look up Bethlehem Steel pensions...

That was a big blow to my faith in the US system. When unions negotiate for their workers, they typically make the same bargain that civil service workers for cities and counties do: take somewhat lower week to week wages in exchange for better benefits now and pensions later. Those pensions are supposd to be safe.

When Bethlehem Steel went under, the entire pension fund was stripped bare.

The other blow to my faith in the system was the wholesale shifting of responsibility for retirement pensions to the 401K system. As a low-wage worker myself (secretary/Admin Asst) I immediately saw the gaping flaw in this plan: How can anyone reasonably expect the janitor, the groundskeeper, the clerical worker to personally save enough out of every paycheck to retire on? How were any of these people supposed to know how to invest their funds, when their point of reference was a bank? How can you expect they will never have an emergency that causes them to take out their money, which they will never be able to pay back?

As for McDonnell Douglas, my dad worked for Lockheed Aircraft for 44 years. The possibility of layoffs gave my mom great anxiety, because pensions were vested after something like 25 years, but on some formula that always had her saying "and he would get not one nickel!"

[spooky3]

25. PBS Frontline did a good documentary on this

Several years ago. You can watch online if interested.

http://www.pbs.org/video/frontline-retirement-gamble/

[MichMan]

27. Except, if the Bethleham Steel retirees had a 401k, they wouldn't have lost all their retirement $$

I have has a 401k for many years and it doesn't matter if the company I worked for ever went bankrupt or not, nor did I have to work for the same company my entire life. People today are not going to work for the same company their entire lives like they used to.

I'm not an expert on investing, but chose a couple of the options that were available and just let it ride. Most 401k now have specific funds set up depending on your age with appropriate risks. Not only that, the money will still be there for y wife after I pass away

I usually put in just 6% a year and the company matched the same amount. Wasn't a huge amount out of my paycheck and over 30 years, it grew nicely due to compounding. I bounced around several jobs before I was 30, and never worked enough time at any to become vested. With the 401k, I was able to roll it over as I moved from job to job. Maybe they don't work for everybody, but have been good for many others like myself

I also saw co workers that did some really dumb things. The company I worked for tried to get everyone to enroll in the 401k plan by opening an account and depositing a base amount for everyone plus a match for anything additional that we contributed. When the plant closed "Mike" (who was in his early 50's with some health issues) just cashed it out and bought a Chevy Nova hot rod because in his words. "I didn't put any in, so it was like free money"

[Hekate]

28. Are you a blue collar worker with a high school/community college education? Just curious. nt

[MichMan]

30. Always worked in manufacturing plants

I was minimum wage working menial jobs with HS and some college before dropping out . Got a blue collar job & continued going to college at night for years after work to get a 4 yr degree. Took many years and student loans before I finally graduated when I was 30.

My point was, for many people having a 401k is a better option that a traditional pension; especially if you change jobs several times

[CousinIT]

2. THIS is why Social Security is increasingly important. Cut or take THAT away too and ...

...seniors would be absolutely DEVASTATED. Most are already hanging on by a thin thread as it is - and a big part of that is the de-unionization of American workers which resulted in stagnant wages and loss of crucial benefits like defined-benefit pension programs. This man is an example of the result of that. Wal-Mart gave him a stool but many years before he retired, this three-legged retirement stool was robbed of one leg (pension benefits). That left him with only two legs on his retirement stool and that is very unstable. Now, he's overly-reliant on social security, his savings and working at Mall-Wort to survive. If another leg of his retirement stool is cut or gutted (social security), he'd be devastated. ANY ONE OF US could and likely many of us will be in his position or much worse if we don't BUST OUR ASSES to protect and form more worker unions -- AND to protect OUR social security from the goddamned robber barons who, as we've just seen in the past few weeks, are salivating to get their greedy hands on it so they can hand it over to the Big Corporations, Wall St. and the Billionaires.

Social Security wasn't intended to be a sole source of income in retirement but sadly for many, it is. Cutting or gutting that is just damn cruel -- and unnecessary! Republicans keep calling social security "welfare" or a ponzi scheme or they say it's "going broke". NO. NO. and NO. Social security is OUR money. It's retirement insurance. And like any insurance benefit WE paid for it and it's OURS to collect on when we retire. It's not an "entitlement". It's an EARNED benefit. And CONgress (the RepubiCONs especially) have NO need and certainly NO business cutting or gutting OUR insurance benefits we PAID for just so billionaires can have more money and/or so that CONgress doesn't have to pay back (via higher taxes on corporations & wealthy) the money they stole from OUR insurance trust fund.

The $17 Trillion Delusion: The Absurdity of Cutting Social Security to Reduce the Debt

http://www.truth-out.org/opinion/item/21154-the-17-trillion-delusion-the-absurdity-of-cutting-social-security-to-reduce-the-federal-debt


Busting Social Security Myths

https://www.ncpssm.org/EntitledtoKnow/entryid/2026/Busting-Social-Security-Myths

[NJCher]

5. excellent post

and points. I saved it.

Cher

[Honeycombe8]

3. I thought WalMart did away w/the greeters. I haven't seen one for years.

No, Social Security is not intended to be a person's only income in senior years. It's intended to be supplemental. A person still has to save at least a little over the years, and stick it in a general index fund or something. Even if you start doing that later in life, it's helpful. Even if (or maybe especially if) you have a pension. Pensions can be stolen through fraud, lost, or changed. The beneficiaries aren't protected like they are with 401ks and other things.

One of my friends stuck with her job for 10 years, and just when she was about to qualify for the pension plan, the co. changed the rules. The co. was doing away w/the pension plan, and the cutoff for eligibility was 10 years...so although she thought she'd have a pension, she was screwed...no pension. She was 50ish and hadn't been saving much.

Our schools should teach everyday finances. That home ec lass I took wasn't very helpful (basics of cooking & sewing), but it sure would have been helpful to have a real home economics class, where the cost of things, the importance of saving, how to invest, how to balance a budget, etc., are covered. I had to learn such things from making big mistakes.

[Brainstormy]

4. I'm always amazed

at posts like this that assume the decision to retire is optional. Lots of us who are laid off or lose employment after 55 never get another chance to work again.

[Yonnie3]

9. Yep.

but at age 53. Sure, I've worked since, but for a relative pittance with no benefits. Many years I made less than my health insurance cost.

[yallerdawg]

6. Didn't Charles Dickens describe it as...

"surplus population?"

Back to traditional Republican values:

[ck4829]

13. GOP Solution: Don't be old and non-rich

[BSdetect]

15. Its even worse that you think...

"Just the way the 1% want it- work until you can't, then die."

They want you to bid for your work on a daily or even an hourly basis.

Look at the the people who bid for writing work online.

While they secure themselves behind gated communities.

[VMA131Marine]

20. I can't see the whole story due to the paywall but...

The McDD plant closed 23 years ago when Cooney would have been 56. The story does not say how long he worked there, but it seems reasonable to conclude that it wasn't long enough for him to have retired. If he had started working there in his early twenties it certainly should have been enough to retire on. But, otherwise, he would have likely received a lump sum equal to the amount vested in the company retirement plan that would have had to have been rolled over into an IRA to avoid a penalty. Maybe he hadn't been working there that long and so the amount wasn't that large. Maybe he didn't make enough afterwards to put much, if anything in a 401k. There's a lot missing from the picture, but what is true is that the traditional pension is a thing of the past in the private sector. I consider myself fortunate that I have a defined contribution plan in addition to a 401k match. People who started a few years after me only get the 401k match, although it is larger than mine.

[Xolodno]

21. Social Security was implemented to supplement your retirement income.

Not be only income. Pensions were supposed to be the dominant retirement income...however, the cost to administrate them have been shooting through the roof...almost on purpose to eliminate them.

Company I work for is freezing theirs this year. I'm grandfathered in the defined benefit plan, but a few years back, they switched to defined contribution for the newer employee's...now they are eliminating it and contributing 3% extra to the 401k, no need to match. Granted, they match up to 6% currently...but you still have to match. But I told the younger employee's....just wait in five years, they will change it and you'll have to match it. Yes that means the company will match up to 9%...but you still have to contribute...whereas in the past you didn't.

And I wouldn't be surprised later if they tie the extra 3% to the companies performance. They did that years ago with the bonus, with the usual BS "Oh but if we exceed our goals, your bonus will even be larger than before!" Take note, we've yet to meet all our goals and have continued to receive less than what we got before.

[Irish_Dem]

26. Our healthcare and retirement are at the mercy of corrupt and greedy corporations. nt

[doc03]

31. Yes you can lose a pension if it is not a Defined Benefit Pension insured by

the PBGC. Before Reagan a DB pension was considered a liability and a company couldn't touch the money. But under Reagan
they were changed to an asset. That gave birth to corporate raiders like Wilber Ross.
I have an example of that myself. In 1995 I worked at Wheeling Pittsburgh Steel. We went on strike that year to get a new DB
pension to replace the one we lost during a 1985 bankruptcy. The owner didn't want to give us a DB pension, he said it would cost him $185 million. But after 10 1/2 months strike he agreed to settle. Now he didn't come up with $185 million himself. What he did was
made a hostile takeover of a company called Handy and Harmon. Handy and Harmon had an over funded DB plan. He merged our new plan into theirs. Therefore basically stealing the money that belonged to the employees of Handy and Harmon to give us a pension. It is a long story but Wheeling Pittsburgh Steel liquidated in 2003 but I still receive my pension check from Handy and Harmon Corp.

That is what Wilbur Ross did to make his billions. He bought up troubled steel companies. He came in raided their pensions (legacy
costs), sold off any valuable property and opened the company back up with half the labor costs since they no longer had any legacy costs. Then he flipped the company for a nice little profit. Now we find out he also laundered the money and took it out of the country.

[Ferrets are Cool]

36. Pension? What is a pension?

I've worked my fucking ass off for the last 42 years and have never been employed by any company offering a pension. I know they exist, but not for everyone.