Very well said! Hits the nail exactly on the head!! -TS
From: [email protected] [mailto:[email protected]] On Behalf Of Jim Flanagan Sent: Sunday, July 25, 2010 8:31 AM To: Tech Geeks List Subject: [tech-geeks] Fwd: WLSU: Somebody Got It Right Very interesting editorial Jim An editorial about "Pension Envy" from the St. Louis News Is it "reform" or a green-eyed monster? Pension envy Posted: Sunday, July 18, 2010 The Russian word zavist, roughly translated, means envy of the meanest, most black-hearted kind. In his 2003 book, "Envy," scholar and critic Joseph Epstein relates a joke of the sort that Russians tell on themselves that perfectly captures the meaning of zavist: "An Englishwoman, a Frenchman, and a Russian are each given a single wish by one of those genies whose almost relentless habit it is to pop out of bottles. The Englishwoman says that a friend of hers has a charming cottage in the Cotswold's, and that she would like a similar cottage, with the addition of two extra bedrooms and a second bath and a brook running in front of it. The Frenchman says that his best friend has a beautiful blonde mistress, and he would like such a mistress himself, but a redhead instead of a blonde, and with longer legs and a bit more in the way of culture and chic. The Russian, when asked what he would like, tells of a neighbor who has a cow that gives a vast quantity of the richest milk, which yields the heaviest cream and the purest butter. 'I vant dat cow,' the Russian tells the genie, 'dead.'" Lately, whenever we read of another attempt to "reform" pensions, we think of the Russian's cow. Two out of every three private-sector workers in America no longer are covered by traditional pension plans. Such "reform" has contributed to a crisis in retirement security. Social Security will pay most of us about a third of what we made before retirement. Most Americans - 90 percent by some estimates - aren't saving nearly enough money to make up the difference. But instead of changing that - fighting to salvage pensions, pushing for reforms in retirement savings funds and insisting that policymakers don't sell out workers - we want to spread the misery. The guy with a pension? We want his cow dead. In June, machinists at Boeing Co. made noise about going on strike over the issue of pensions. Instead, the workers agreed that employees hired after 2011 would get an "enhanced 401(k) plan" but not a pension. Before that, it was auto workers whose pensions and health benefits who were blamed for the industry's troubles. Before them, it was airline workers who saw pension plans gutted by bankruptcy cases. Before them, it was steel workers whose pensions, it was said, were the reason American steel couldn't compete with foreign imports. There is some truth to these claims. Globalization changed the calculus for both workers and industry. In the long view of history, the window for retirement security may have been open for only 50 years or so. Before World War II, pensions were almost unheard of. Indeed, before the Social Security Act of 1935, old-age security was considered the individual's problem. If there was no family to help, older Americans often lived in abject poverty. With prices and wages frozen during the war, pensions were a benefit that companies could offer to attract and keep employees. For much of the next 40 years, Americans could count on working a lifetime for the same company and retiring with a pension and a measure of comfort. And because state and local governments couldn't compete with private employers on salary, they tried to make it up by offering more generous pension plans. Teachers, cops and other government employees took low salaries in return for a comfortable - and sometimes early - retirement. All of that began to change in 1974 with the passage of the Employee Retirement Income Security Act. It was intended to make pensions more secure and to allow individuals to set aside tax-free income in "individual retirement accounts." It was shot through with loopholes that employers began to exploit. Four years later came the Bankruptcy Reform Act of 1978, which allowed companies to shed pension obligations through bankruptcy. That same year brought a new subparagraph to Section 401 of the Internal Revenue Service Code. Subparagraph (k) originally was intended to allow wealthy people to shield more of their income for retirement. Instead, the now-famous 401(k) account became the magic bullet. People could take control of their own retirements. Wall Street could make fortunes in management fees. For the diligent and prudent, it worked fine, at least until the stock market collapsed. Companies hit hard times and reduced or stopped making matching contributions. The average 401(k) has bounced back strongly over the last year, but as of March 31, the average balance was $66,900, according to Fidelity Investments. If personal savings and Social Security are all he's got to work with, a person will need six to eight times that much to have $50,000 a year on which to retire. But some people have it better. More and more, they are public employees. They still have pensions. They have used political and electoral clout to keep them even as private-sector pensions went the way of the dodo. They are the ones with the cows that a lot of people want dead. And because they're paid with tax dollars, they're the ones who are the target of many pension "reform" efforts. The Missouri Legislature just eliminated defined-benefit pensions for new employees who join the worst-paid state work force in the nation. The city of St. Louis is taking dead aim at the pension funds of its firefighters. The state of Illinois , which is in de facto bankruptcy, has been borrowing billions to meet its pension obligations. The average retired Illinois state employee gets a $22,593 pension. Many, particularly educators and state officials, do far better. One retired University of Illinois doctor gets more than $460,000 a year. In 2009, 13 state troopers retired on more than $100,000 each, according to pension critic Bill Zellick. But for everyone doing way better than average, many do far worse. And because many public employees don't pay Social Security, it's often their entire retirement kitty. We're all for reforming the excesses. But we ought to do it fairly for sound economic reasons, and not just - as the Russians would put it - out of zavist.
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