Who Ran Away With Your 401(k)?-How the boss absconded with your benefits. (Mother Jones)

[kpete]

Who Ran Away With Your 401(k)?
How the boss absconded with your benefits.
—By David Cay Johnston


—Illustration: Asaf Hanuka
May/June 2009

john snow won't have to worry about his retirement. When he left the csx railroad to become George W. Bush's second treasury secretary, he took with him a $2.5 million annual pension. The figure was based on 44 years of employment at csx, never mind that Snow had been there for only 25 (during which, incidentally, he brutally cut safety and maintenance, to the point where a jury awarded a widow $50 million in punitive damages after a derailment—money paid by the taxpayers because of a little-known law that insulated Snow and his company from the costs of his egregious judgment). That kind of boost is unheard of for the rank and file, but not at all uncommon for corporate executives and owners.

Snow's case is typical of the way corporate executives have, for the past 35 years, managed to gild their retirement benefits even as they hollowed out workers' pensions. It started with the 1974 Employee Retirement Income Security Act, the law ostensibly designed to ensure that workers could collect the retirement benefits they'd earned. erisa brought some important reforms—including establishing the federal Pension Benefit Guaranty Corporation (pbgc) to help workers whose pensions went bust—but it also was riddled with favors to business. And in the decades since, legions of lobbyists have helped create numerous new loopholes, exemptions, and special deals. The result is two separate and unequal pension systems: Executives get the equivalent of antebellum mansions, while workers get leaky shacks liable to collapse at the first harsh economic wind. Here are 10 of the key ways in which it happened. (Be warned: This stuff gets a bit technical. Washington is full of people who are very well paid to figure out insanely complex ways to take money from you and me.)

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more at:
http://www.motherjones.com/politics/2009/05/who-ran-away-your-401k

[MountainLaurel]

1. Thanks for posting -- read this about a week ago

And thought it was informative and frightening at the same time.

[nilram]

2. The article is about pensions, not about 401ks

The article is "Pension Privateers" but the Mother Jones special section is "Who ran away with your 401k." Ninety percent of this article is about pensions.

It has valid points, but few people have pensions anymore -- that's what 401ks are for, to make you feel good while the company screws you out of a pension. 401ks are "defined contribution" plans, pensions are "defined benefit" plans. Meaning: With a pension, if you put your time in at a company, you were guaranteed to get a retirement. With a 401k, if you put your money into it, you aren't guaranteed diddly-squat.

[KharmaTrain]

4. Many Had Few Choices

In the 80's there was the constant scare that Social Security was going bust and it surely wouldn't be around for those of us who were entering the work force by the time we were 65. Combine that with union busting that not only drove many unions out of representing millions of workers but shut down pension options for many as well. The only options were to go into 401ks and other investment based "pensions" or more specific, "retirement" accounts. Most people went along, told their money wasn't only safe, but by investing several thousand now, there'd be a million by the time you'd retire. Many of those people saw a lifetime of work and "savings" wiped out in the past 18 months.

[Hannah Bell]

3. which is the truth about the growth in upper incomes; basically it's been just income transfer from

the bottom 90%.