I urge you to read this full story at the link below; its a depressing and unnecessary tale repeated throught the Country. “traditional pensions have proved unsustainable” .. what a joke. There are so many absurd statements in this article it is entertaining, but very sad.
Pension plans were sustainable for decades and decades going back as far as the 19th century. The pension plan I used to manage was started in 1911.
What changed was the irresponsible management of such plans (especially states) and the simple lack of commitment to them caused in large part by accounting rules and government regulation and administrative costs… all having the unintended consequence of undermining retirement for tens of millions of Americans.
There is no reason that a prudently designed and funded pension plan cannot provide a solid foundation annuity income (supplemented by 401k type savings and personal saving).
We are creating such an intolerable retirement situation that sooner or later government will step in and the cost to employers will eventually exceed the cost of a traditional pension and they will have lost all control to politicians. A good pension plan costs between 8% and 10% of pay. Workers either won’t receive that in cash compensation or will have it taken in taxes.
The state’s teacher pension fund has only 55% of the money needed to cover benefits during the next 28 years.
Republicans also argue that a new benefit tier for future hires and other structural changes are an essential part of any solution to help the system meet current obligations and avoid racking up more shortfalls. They say that traditional pensions have proved unsustainable in the private sector and that state government must follow suit to protect taxpayers.