Retiree Pensions Further Weakened

Given the opportunity to stand up for responsible American savers and retirees, our federal government has lately almost always done the opposite. President Obama recently signed into law “The Surface Transportation Bill.” The bill’s intent, written in typical incomprehensible language, is to fund transportation infrastructure programs and keep the student loan interest rates low.

What the law accomplishes is the further weakening of private pension plans across the nation. Employers are authorized to contribute less money into their pension plans. Our cash depleted government loves this because, since pension plan contributions are tax deductible, more tax revenues will head their direction. Businesses like the change because they can retain more of their earnings instead of tying them up in pension funds.

Consider this frightening fact: as of 2009, four out of five private pension funds were considered underfunded by the Pension Benefit Guaranty Corporation (PBGC). Even worse, the PGBC, our government’s “safety net” for retirees, has been underfunded every year since 2002. Those who have had their private pensions sent over to the PBGC can let us know how well that is working out for them.

In the end, we now have yet another law that assaults the individual liberties of hard-working, responsible American citizens by making it more and more difficult for us to plan and maintain our own financial futures. How long are we willing to allow this inevitable train wreck to gather speed? Isn’t it about time to wake up to the reality that we are taxed and regulated enough already?

Reference: Nilus Mattive, "Another Way Washington Just Robbed Retirees," July 17, 2012