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Month-to-month Evaluation | Getting your pension shouldn’t be a raffle (James Russell reviewed by Steve Early, for Labor Notes)

Share this…FacebookPinterestTwitterLinkedin The Labor Information to Retirement PlansFor Union Organizers and Workers256 pages, $24, 978-1-58367-933-3by James W. Russell Reviewed by…

By Staff , in Retirement Accounts , at September 14, 2021

The Labor Information to Retirement Plans
For Union Organizers and Workers

256 pages, $24, 978-1-58367-933-3
by James W. Russell

Reviewed by Steve Early

In current a long time, a high administration precedence on the bargaining desk has been lowering the price of retirement advantages. The pandemic and its financial fallout have generated a brand new spherical of employer calls for for pension freezes, profit cuts, plan conversions, and two-tier protection. Jim Russell’s new e-book The Labor Information to Retirement Plans reveals why and the way non-public and public sector unions ought to be mobilizing members in opposition to such concessions.

This e-book might be a important useful resource for defending retirement security on the bargaining desk and within the political area. It’s not solely a extremely readable account of retirement plan financing and administration, with a helpful glossary of layperson explanations of generally complicated technical phrases. It’s additionally a name for labor motion to strengthen “our nationwide pension plan,” aka Social Security, which is the only supply of retirement earnings for 1 out of 4 recipients and a perennial goal of privatization efforts.

Now a professor at Portland State, the writer first obtained concerned in pension struggles when his personal particular person retirement account, as a Connecticut public worker, took successful within the Nice Recession of 2008. Russell helped lead a profitable marketing campaign to permit state employees, with inferior 401(ok)-style protection, make a uncommon change to a defined-benefit plan with higher advantages. (For extra on that battle, see this text and Russell’s earlier e-book, Social Insecurity: 401(ok)s and the Retirement Disaster, Beacon Press, 2015).


Most employees nonetheless fortunate sufficient to have an employer-sponsored plan have been pushed within the different path—from conventional pensions, with group protection and assured advantages, to riskier particular person retirement accounts with outlined contributions and extensively various payouts.

The general public sector is changing into the final redoubt of the previous mannequin. As Russell notes, “Republicans and a not insignificant variety of Democratic politicians” have been doing “a wonderful job of convincing a lot of the general public that these conventional plans are a expensive burden on taxpayers, overly beneficiant, threaten to bankrupt governments, and cut back funds for wanted public providers similar to schooling.”

Underlying this Wall Avenue-backed propaganda marketing campaign is the promotion of what Russell calls “pension envy” amongst non-public sector employees “now wanting ahead to an insecure retirement with inadequate 401(ok) financial savings.” In The Labor Information to Retirement Plans, Russell does a great job of recounting the 40-year development of those particular person retirement accounts, with their enchantment of higher portability for workers and decrease prices for his or her employers.

In union bargaining items, 401(ok)s have been initially welcomed as a complement to conventional pension protection. In non-union settings with solely 401(ok) protection, it was assumed that retirees would convert their amassed particular person financial savings into business annuities, offering pension-like incomes.

This didn’t happen on a big scale as a result of buying such annuities turned more and more costly, making them unaffordable for 401(ok) account holders with financial savings, at retirement age, that have been far too small. As one Common Accounting Workplace examine discovered, in 48 % of U.S. households inhabited by adults age 55 or older, the median quantity saved for retirement was $109,000. The opposite 52 % of such households had no retirement account cash, since many roles supply neither conventional group pension protection nor a 401(ok).

Regardless of their important shortcomings, 401(ok) accounts turned a widespread substitute for outlined profit plans, which Russell calls the “pension gold normal.”


Russell gives sound recommendation for these negotiating concerning the phrases of those outlined profit plans, which nonetheless quantity 50,000 and have 60 million individuals amongst lively or retired employees. As he notes, within the present bargaining atmosphere, “individuals and their union representatives usually tend to be considering defensively” as a result of “they need to push back assaults that may lower or get rid of advantages and, in lots of instances, finish the pension plans fully.”

Nonetheless, he urges unions to take the offensive with calls for for improved cost-of-living changes and profit calculation formulation, plus the chance (which some plans present) to buy further service credit. Russell recommends that union members with money stability plans—a hybrid mannequin of retirement protection—search the choice of rolling over “their 401(ok) or related accounts, if they’ve them, into their money stability plan to have the ability to enhance the scale of their pension annuities.”

Russell additionally warns concerning the disadvantages of changing to money stability plans within the first place, even when these more and more widespread retirement automobiles are preferable to 401(ok) protection as a result of they nonetheless present assured pensions from professionally managed collective belief funds.

He cites specifically the retirement plan adjustments foisted on staff of the Washington Submit after the paper was bought in 2013 by Amazon founder Jeff Bezos. The world’s richest man “froze a extremely profitable overfunded pension plan” and changed it with an inferior mannequin. Some retirees misplaced tons of of 1000’s of {dollars} in retirement earnings.

Learn the remainder at Labor Notes

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