Connecticut Public Employee Activists Fight for Pension Justice

Out of the limelight, public employee activists have achieved a near victory in their quest for a fair pension plan.  However, fulfillment of a national precedent setting grievance award to allow Connecticut state employees to transfer from a defined contribution 401(k) type retirement plan into the state’s traditional defined benefit pension system has been delayed.Continue reading “Connecticut Public Employee Activists Fight for Pension Justice”

Boomers Find 401(k) Plans Fall Short – Wall Street Journal

Every once in a while the Wall Street Journal tells it like it is.  Such is E.S. Browning’s “Boomers Find 401(k) Plans Fall Short” in the February 19, 2011 issue. If you want to read it through this link, do it soon as it will be closed to non subscribers in seven days.

401(k) Open and Hidden Fees

Management fees, commissions, and profits severely compromise what can be accumulated in 401(k) and other defined contribution retirement plan accounts. Defined contribution participants typically lose from 20 to 30 percent and more of their accumulations to investment management fees charged by the financial services industry.  The administrative overhead costs for defined benefit plans are muchContinue reading “401(k) Open and Hidden Fees”

How 401(k)s Discriminate Against Women

401(k)s are set up so that participants will accumulate funds during their working lives and then purchase annuities with those funds to finance their retirement.  They could also actively manage their portfolios during retirement, but most experts agree that annuitizing produces more stable income security. The annuity business is based on calculating life spans.  SinceContinue reading “How 401(k)s Discriminate Against Women”

Are 401(k) Participants Being Swindled?

Some readers may find the word swindle too strong of a term to describe what took and is taking place in the conversion from traditional pensions to 401(k) and other defined contribution plans.  A swindle suggests illegality and what took place was perfectly legal.  Or was it?  Upon closer examination, where the financial services industryContinue reading “Are 401(k) Participants Being Swindled?”

401(k)s versus Social Security: Comparing the Rates of Return

A common claim of advocates of Social Security privatization is that private accounts deliver much higher rates of return for participants. The Cato Institute, for example, in its Cato Handbook for Policymakers tells us that: �Social Security taxes are already so high, relative to benefits, that Social Security has quite simply become a bad dealContinue reading “401(k)s versus Social Security: Comparing the Rates of Return”

Bad Timing of Investments Harms 401(k)s and Pension Funds

There is an interesting graphic on investment returns in the January 2 New York Times, titled In Investing, It’s When You Start and When You Finish. Thanks to Nat Trumbull for pointing this out to me. It indicates one of the reasons why 401(k)s have done so poorly. I would argue, though, that even withContinue reading “Bad Timing of Investments Harms 401(k)s and Pension Funds”

The Retirement Crisis and This Blog

The Perfect Swindle is about understanding and finding solutions to the growing retirement crisis facing tens of millions of Americans. Since 1981 shaky 401(k) schemes that depend on stock market investing have increasingly replaced secure, traditional pensions. The financial services industry encourages the belief that these schemes will produce generous benefits. But 30 years afterContinue reading “The Retirement Crisis and This Blog”