When it comes to legislative acts, there are the intended consequences of such an act, but there are also those unintended consequences, as well. The thing about a society that has so many attorneys is the fact that highly intelligent and ambitious people have an inconvenient habit of taking a particular legislative act that is intended for one thing and utilizing it in a way and manner that it was not really intended for, instead. That is to say, we read at ssa.gov, that “From 1980 through 2008, the proportion of private wage and salary workers participating in Defined Benefit (DB) pension plans fell from 38 percent to 20 percent.” This thus begs the question as to what replaced those pension plans, and that is answered by 401(k) plans which came into effect through the 1978 Revenue Act. The difference between a Defined Benefit pension plan and a 401(k) is the difference between the fact that pensions will provide the employee with a guaranteed lifetime annuity, typically based on years of employment as well as salary; whereas, a 401(k) plan may or may not have had any employer matching, and is basically then the employee’s contribution to their retirement, through the sacrificing of a portion of present salary to be thereby allocated into their retirement fund. In other words, pensions are funded by the employee’s company, and 401(k) plans are funded by the diversion of current salary into a retirement plan to draw upon when so retired.
As might be imagined, monies not being expended for pensions by corporations, thereby provides those same corporations with extra money to be distributed or utilized as they best see fit, of which, it can be said for a certainty, that money won’t be divvied up with regular employees but rather will have a strong tendency to go to stockholders in a form of a dividend, be reinvested into the company, or provided to those that are in upper management, instead. So then, those who previously would have expected to have received a guaranteed pension in their retirement years, are now essentially responsible for their own retirement income stream, and therefore because of that lack of pension money, are easily susceptible to having a more difficult time in maintaining their status as part of the middle class during their retirement years.
So too, whenever corporations don’t feel a responsibility to take care of those employees who have been loyal and good workers for them, but instead leave them to essentially deal with their retirement on their own, we see that corporate fair play has, in essence, been replaced by greed. Additionally, those other corporations that desire to do the right thing by their employees may find themselves pressed to do the same sort of thing, so as to compete successfully against other companies, and are therefore inclined to suspend or delete their pensions, as well, leaving those that have labored hard for decades, to have to ride out their remaining years, wondering whether or not, they have the necessary funds to continue to have a quality life, along with also questioning if at the end of the day, they got a square deal or not, in this the richest nation that the world has ever known.