Monday, July 21, 2014

Defined Benefit Pensions, Enemy of the Poor

Across the U.S. and around the world, defined benefit programs are in decline because corporations and governments can't handle the uncertainty and because millions of workers prefer the control and portability that comes with an individually controlled defined contribution (DC) account. Despite the popularity and simplicity of DC plans, the public sector in America remains largely entrenched and unwilling to shift away from DB plans.(source infra) 

Defined Benefit Pensions Are An Enemy of the Poor | RealClearMarkets: "... The system sounds outrageous and unbelievable, and liberals should be among the most outraged: A sacred progressive program of theirs is no And, easy, obvious solutions that empower the poor through personal accounts are available and have worked in the private sector and in some states. Like most problems involving the poor, the problem is not a theoretical one or a policy problem per se, but, rather, a political one: entrenched interests have strong incentives to protect the status quo against change. And, when those in power dig in put their own well-being ahead of fact and truth, the result for us is that important issues for the poor and younger people--financial security, poverty alleviation, leaving our children something better--get evaded and ignored." (read more at link above)


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