Many of you are aware of the trend of large corporations eliminating their programs that provide pensions and health care benefits to retirees. Those of you who are younger may not be so concerned because of the rather recent implementation of savings plans such as IR-4 that are intended to provide retirement income. However, there are a large number of “baby boomers” now facing retirement that have not been covered by IR-4 plans for sufficient time to accumulate significant savings. Individuals in this age group are facing imminent financial difficulties that they may not have been able to prepare for.
Politicians are doing nothing to prevent this “stealing” of benefits from employees, and that inaction will contribute to a decline in the economic stability of our entire society, not just that of the retirees.
I will refer to my personal situation to describe the statement that “Our employers are ripping us off big time. I am now 66 years old - just a few years older than the baby boomers - so many of them will be confronted with what I encountered.
I had been employed in the same industry by a large, multinational "Fortune 500" company for many years and was anticipating a pension of at least $5000 monthly. Then, just prior to my 60th birthday, that company announced that they were canceling their pension program. Recognizing that my retirement income would be drastically reduced, I chose to retire immediately and seek employment with another company that still had a pension program. I was soon working for a different multinational company in the same industry, but within six months of my employment, they also canceled their pension program.
The second company had already canceled retiree medical coverage, but I had been “grandfathered” for that benefit by my previous employer. When I retired, I began paying $217/month for health coverage (medical, dental and visual) for three family members. Soon, however, I was advised that my premium had been increased to approximately $1000/month, and then, the coverage was totally eliminated.
At the age of 65, I became eligible for Medicare, and I anticipated that my medical insurance premium(s) would become reasonable. However, today, at the age of 66, the health care premiums for my family (my wife, daughter and me) exceed $14,000/year.
In our country, employers are permitted to eliminate pension programs and retiree medical benefits that had been promised to their workforce. Politicians and the government are doing little, if anything, to correct that situation. It is interesting to note that politicians and other government personnel are presently protected from such atrocities because of their “entitlements.” Only private companies are so unfair to their employees at this time. Will voters permit this inequity to continue, or will government employees eventually be in this same situation?
I utilized a personal situation to illustrate something that is not unique. If only a few employees were affected by such employer practices, it would not be important. However, a large segment of the population is reaching retirement age, and many of them will face the situation that I described. Especially with the depreciation in house values, the rise in taxes, gasoline prices exploding and medical expenses going out of sight, all of us must be concerned and speak out.
Greed at the top in American corporations is eroding the standard of living for much of our society. Top management (Chief Executive Officers, Chief Financial Officers, etc.) have found that they can “improve the bottom line” - often lining their own pockets - by taking from employee pension funds and medical benefits plans. This should not be legal, yet politicians in this country have permitted the practice to continue without implementing corrective regulations. Even the American Association of Retired Persons (AARP) has been relatively quiet on this subject.
This “stealing” of anticipated retiree benefits will negatively impact the living standard of at least one generation of employees, and the concept of top management increasing their own compensation by taking from the masses will likely continue. All of us must make the effort to stop this trend.
If there is sufficient interest in this introductory letter, I will explore the subject more extensively and propose solutions in future correspondences.
