“Pension are good for young people.” That seems a strange thing to say but take a moment to think about a future where older people CAN’T retire and you’ll quickly confront some very ugly realities.
Thomas Mackell Jr. is a former Wall Street executive who is now warning of a future in which the homeless elderly live under bridges and the old and the young engage in “intergenerational warfare” over disappearing jobs. Mackell notes:
“It’s a recipe for disaster,” he said in an interview, noting the average 401(k) account amounts to some $50,000. In the past 30 years, Mackell said, the percentage of workers in defined benefit plans dropped from more than 80 percent to less than 30 percent.
“Fewer than half of the Baby Boomers have plans for their retirement and a third saved nothing at all,” he says, adding that 401(k)s were intended to supplement, not replace, pensions.
Many will be unable to retire, says Mackell, who heads an association of benefit administrators and is author of “When the Good Pensions Go Away” published by Wiley. He predicts growing hostility between young and old workers.
“Good jobs won’t be there for the younger workers because older workers will hold on to them,” Mackell said. Unless, of course, seniority rights are taken away as a cost-saving tool.
He says defined pension benefits were eliminated to help corporations improve profit margins and increase shareholder income.
“The risk has been transferred to workers who have no clue how to manage stock portfolios,” he says. “Even people on Wall Street don’t do well predicting how stocks will react, but you’re asking people who don’t know the difference between a stock and a bond to make decisions that could make the difference between a future of comfort and a future of poverty.”
Intergenerational fairness is basic to a peaceful society. Pensions give money to the old and opportunity to the young. We forget this at our peril.