Saving the Fairies
What can be done? Congress is weighing legislation that would require companies to fully fund their pension plans and to pay higher premiums to the pension-guaranty corporation. The White House is proposing an $18 billion increase over five years. Many companies don't like this, and their lobbyists are pushing to reduce any premium increase to a third of that thought necessary. Additional regulations would prevent firms with underfunded plans from making new pension promises they are unlikely to fulfill.
This legislation offers real hope of preserving the dream, but we must do more, improving productivity and keeping a sharp eye on compensation, especially to senior executives. Over the long term, the risks to American businesses and the economy lie in the vagaries of global competition, specifically from businesses in China and India, which have much lower wage and salary structures and virtually no pension or healthcare obligations.
The sad fact is that a new generation of retirees, many the grandchildren of those who enjoyed complete retirement security, is facing a much higher risk of financial hardship in what should be their golden years--for both healthcare and pensions. The pension-support legislation now on Capitol Hill must be passed without dilution to ensure that the burden on taxpayers doesn't grow and to guarantee that at least a semblance of equity is retained in pension distribution. And Social Security must be preserved. Think of it as giving the three fairies a new lease on life.
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