Detroit Free Press: Disappearing pensions make lives less secure

[marmar]

WHY THINGS CHANGED | THIRD IN A SERIES
Disappearing pensions make lives less secure
BY JOHN GALLAGHER • FREE PRESS BUSINESS WRITER • October 14, 2008



Through most of his working life, steelworker Ray West looked toward a secure retirement.

His company pension was expected to bring in around $30,000 a year, his union contract promised retiree health coverage and he had 401(k) savings of about $50,000.

Three years ago, it unraveled. His company filed for bankruptcy. The collapse reduced his expected pension to around $5,000 a year and canceled his retiree health insurance. And, in three years of unemployment since then, West of Hazel Park blew through the entire $50,000 in his 401(k) just getting by as he trained for a new career.

"I lost my job after 27 years before I got my retirement. I ain't going to get nothing," says West, 52.

Of all the threats to the American middle-class standard of living, from stagnating incomes to piles of consumer debt, perhaps the least understood and among the most serious is the looming crisis in retirement.

Several trends, each debilitating alone, are due to converge on the middle class over the next decade or so.

Traditional pension plans are disappearing in the private sector. Workers aren't saving enough in their voluntary 401(k) accounts. Longer life spans are stretching savings even thinner. Social Security remains under stress. All that was going on before retirement plans lost $2 trillion in the stock market dive.

Taken as a whole, the trends point toward a massive problem as people now in their 40s and 50s start to retire in 10 to 20 years. ......(more)

The complete piece is at: http://www.freep.com/article/20081014/BUSINESS07/810140373

[antigop]

1. And imo the Dems share the blame-- what have they done to protect pensions?

They were co-conspirators in passing the so-called Pension "Protection" Act which legalized conversions of traditional defined benefit pension plans to cash balance plans.