Skip to main content

Why are the billionaires always laughing?

Because they know the corporate media will never call bullshit on their bullshit.

Why are the billionaires laughing?

It’s easy to laugh when the corporate press treats you as a glorious success instead of the epitome of a broken social order. Billionaires laugh because they know the corporate media prefers to fawn over them rather than hold them to account.

Today, we ask you to support our nonprofit, independent journalism because we are not impressed by billionaires flying into space, their corporations despoiling our health and planet, or their vast fortunes safely concealed in tax havens across the globe. We are not laughing.

We are hard at work producing journalism for the common good. With our Fall Campaign underway, please support this mission today. We cannot do it without you.

Support Our Work -- Join the small group of generous readers who donate, keeping Common Dreams free for millions of people each year. Every donation—large or small—helps us bring you the news that matters.

Economists "warn that rarely, if ever, can people replicate the security of a pension,"

Economists "warn that rarely, if ever, can people replicate the security of a pension," said Karen Friedman, executive vice president and policy director of the Pension Rights Center. (Photo: 401kcalculator.org)

Bolstering Call to Expand Social Security, New Reporting Reveals How Corporations Are Offloading Pensions

Not only are pensions being offered less, existing pensions are being transferred to insurers, with employees suffering consequences

Andrea Germanos

New reporting showing companies' scrapping of pension plans has gone into overdrive means that Social Security must be expanded, an advocacy group said Wednesday.

"Expanding Social Security is important for today's retirees," Social Security Works said in a tweet, "but even more important for tomorrow's.

The shift from traditional pensions to 401(k) or similar retirement plans—a change panned as an inequality-fueling disaster—isn't new. "But lately," reported Axios, "those changes are happening even faster."

The outlet attributed the development to a "perfect storm of circumstances, from lower interest rates to higher longevity rates," which "is prompting corporations to offload their pension plans—by selling them to insurance companies and offering lump-sum payments to some workers."

This offloading is known as a "pension risk transfer" (PRT).

As Reuters reported in May,

Pension risk transfers are a lucrative business for life insurers and others involved with the transactions.

The deals have been around since at least the 1920s, but rising interest rates and stock market gains in recent years have helped to make them more common. That allows companies looking to purge their pension liabilities to more easily meet the requirement of fully funding their plans before selling them.

Insurers taking over a plan typically write a group annuity contract to cover those pensions, which generates payments to the retirees. Insurers are essentially betting that they will make more in investments than they pay out in pensions.

This PRT business "was the biggest ever in 2018," according to Axios. And a surge was expected, with Bloomberg Law reporting in December: "Pension Buyouts Likely to Be Bolder, if Not Bigger, in 2019."

Axios reported on evidence of the trend.

Among Fortune 500 companies, only 81 sponsored a pension plan in 2017, down from 288 in 1998, according to Prudential.

At the same time, the number of pension risk transfer deals rose to 493 in 2018 from 203 in 2012, according to the LIMRA Secure Retirement Institute, a nonpartisan research center.

As Social Security Works noted in its tweet, the new reporting included a graphic showing a particularly bleak pension outlook for those aged 35 and under:

Whether they're unable to have any retirement plan, are forced to relying on a 401(k) or IRA, or have a pension that gets transferred, workers will likely be shortchanged. They would have no safeguard under the federal Pension Benefit Guaranty Corporation (PBGC), and while a lump sum option may seem attractive, it may not be an economically-wise move.

From CNN:

A 2017 study by MetLife found that one in five retirees who took lump sums spent them down within five and a half years, and nearly a third regretted using large chunks of the money for short-term needs like home improvements."

"Often retirees think that if they exchange their pension for a huge chunk of money— sometimes as large as $300,000 or even $400,000—they can do a better job investing it themselves in the stock market," Karen Friedman, executive vice president and policy director of the Pension Rights Center, told AARP earlier this year. "But economists warn that rarely, if ever, can people replicate the security of a pension."

In March, the Trump administration's Treasury Department said it would not impose a rule banning lump sums to people already retired. From CNN:

You're taking a group of people who are retirees who are already living their lives on a pension, and you are saying to them, 'here, instead of the pension, why don't you take this big check,' and they don't bother to tell them that this big check is worth less than your pension," [former PBGC director Josh] Gotbaum said. "And that's what Treasury said you can go back and do."

Adding to the bleak retirement scenario is the fact that 37 percent of Americans have no retirement savings at all, according to the 2013 report "A Tale of Two Retirements."

"The 401(k) revolution has been a disaster," said report co-author Monique Morrissey, "yet some policymakers are calling for cuts to Social Security, which will be the only significant source of retirement income for most Americans—if they are able to retire in the first place."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do. Without Your Support We Simply Don't Exist.

New Whistleblower Sparks Calls to 'Crack Down on Facebook and All Big Tech Companies'

Hours after another ex-employee filed a formal complaint, reporting broke on internal documents that show the tech giant's failure to address concerns about content related to the 2020 U.S. election.

Jessica Corbett ·


'Catastrophic and Irreparable Harm' to Wolves Averted as Wisconsin Judge Cancels Hunt

"We are heartened by this rare instance of reason and democracy prevailing in state wolf policy," said one conservation expert.

Brett Wilkins ·


West Virginia Constituents Decry 'Immorality' of Joe Manchin

"West Virginia has been locked into an economy that forces workers into low-wage jobs with no hope for advancement, and after decades of this our hope is dwindling," said one West Virginian. "The cuts that Sen. Manchin has negotiated into the agenda hurt our state."

Julia Conley ·


'Texans Deserved Better Than This': Supreme Court Leaves Abortion Ban in Place

The nation's high court set a date to hear a pair of legal challenges to the "horrific" restrictions.

Jessica Corbett ·


'Like It Never Happened': Federal Judge Tosses Trump Attack on Clean Water Rule

Denying a Biden administration request to temporarily retain the rule, the judge reestablished "the careful balance of state and federal power to protect clean water that Congress intended when it wrote the Clean Water Act."

Brett Wilkins ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.


Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo