401(k) Follies

Well, what did workers EXPECT with 401(k)s? Why did companies get rid of their defined benefit plans and put these shit plans in? To save money on pension costs and to transfer the risk to the WORKER, not the employer.

It takes one hell of a lot of money to save to approach anything like a defined benefit plan, since the difference between a defined benefit plan and a defined contribution plan is the former pays you a set amount every month for the rest of your life while you live off the latter as long as the money is there, but is likely to run out long before you die. Therefore, 401(k)s are a giant ripoff.

They're not federally insured, either.

"The current 401(k) system has not turned out to be as secure as we want it to be," said Rep. George Miller (D-Martinez), chairman of the House Education and Labor Committee. "It has not provided the returns that we want it to. And it's not provided the level of savings that we want it to. It's kind of failing on a number of fronts.

"Should there be a serious reassessment? Absolutely," he said.

Miller's committee already has held two hearings on the effects of the financial crisis on retirement savings plans. At one, a professor from New York's New School for Social Research called for creating government-backed retirement savings accounts that would offer a guaranteed, inflation-adjusted 3% return. The government would contribute to the accounts, using money gained by eliminating about $80 billion in annual tax breaks for 401(k) savings.

Frankly, they can get rid of the tax break if it means the accounts are federally insured. It's a tradeoff that's much better.

Better yet, let's require companies through tax incentives to provide true pensions and not these pieces of shit they have forced upon unsuspecting workers.

We ALL Know

we have been sold a bill of goods about 401(k)s, that they are better than defined benefit plans, you know, the kind that guarantee a fixed income every month for as long as you live. God, how anybody who is not already rich could throw their money away on these frauds is beyond me.

The WHOLE point of 401(k)s is to SAVE COMPANIES MONEY on pension costs. A traditional pension plan is VERY expensive, something like 6% of operating costs, while these scam accounts--which they aren't even required to contribute--cost around 1%. All the while they have been pilfering and destroying traditional pensions.

And then you have these privatizing bastards wanting to get their filthy hands on Social Security using the exact same lies that they are using for 401(k)s.

Thank God I am now a public employee and will get a decent pension. I did sign up for a 403(b), a counterpart to the 401(k)s, but that's going to be put aside for vacations and stuff.