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.
------------------------------------------------------------------------
| Subscription info at http://www.tech-geeks.org |
