Retroactive

Just as the banks eliminated regulations which protected the American populace from their arrogance and greed, many corporations and companies have eliminated pension regulations which protect employees against ‘retroactive’ retirement losses. Maybe Ed Gillespie’s announcement that Mitt Romney ‘retroactively’ retired from Bain Capital isn’t all that odd in today’s politically charged and hostile business climate.

According to Ellen Shultz in “Retirement Heist”, “Under pension law, it’s illegal to retroactively cut someone’s pension. However, Cash balance plans provide a way around this prohibition…” “Cash balance accounts are complex. When companies switch to a cash balance account they essentially freeze the old pension, ending it’s growth. They then convert the frozen pension to a lump sum, which they call the “opening account balance”. The lump-sum amount doesn’t grow each year by multiplying years and pay, both of which would be growing, and thus generating the leveraged growth seen in a traditional pension.”

While millions of employees around the country are experiencing ‘retroactive’ pension losses, this new ‘retroactive’ descriptive adjective certainly gives pause for thought. What they’re doing is just getting the public used to the idea of ‘retroactive’ happenings of any kind, and the changing of the rules so those corporate sponsored changes in the rules enable them to benefit financially. Again, according to Ellen Schultz, “…accounting rules turned retiree benefits plans into cookie jars of potential earnings enhancements, and provided employers with the means to convert the trillion dollars in pension and retiree benefits into an immediate, dollar for dollar benefit for the company.”

Companies have been able to use the earnings of their employee’s pension plans for corporate gain and executive pay, hence we now have the “trillion dollar” under-funding of pension plans. the newest latest reality catch phrase circling in the news cycle is “looming liabilities” which is what the retirement account, now looted of it’s funds is called. But the corporate mouthpiece which from the media has one message: “blame the people” just don’t blame the companies…and their lobbyists…and your representatives…and your senators…and your judges who allowed these rules for under-funding to be created. The banks have already taken their savings, so if pension plans and Social Security are eliminated, how are retirees supposed to survive when they can no longer work?