2 thoughts on “Forbes post, “Sears’ Bankruptcy, The PBGC’s Debt, And Your Retirement”

  1. Leaving aside for the moment who will pay, our economy hosts many unfunded liabilities beyond what the PBGC insurance might provide to Sears workers. State and municipal plans, multi-employer plans, Social Security, Federal Civil Service and Military pensions, etc. (all with a defined benefit design). I attribute some of the problem to venality of actuaries who permit sponsors and legislators and union trustees to establish discount, mortality and other rates that are unrealistic. CPAs, lawyers, consultants etc. join in the culpability. None of these professional watchdogs can possibly fix the problems to which they have contributed significantly. So the problems today are who pays and how much. First to go should be subsidized early retirements and public pensions that are out of line with private sector benefits. Bankruptcy would probably be necessary unless unions come to the table. I would personally favor a tax on 401(k) balances that exceed the reasonable needs of the owner of the account. Next we should revive the estate tax and intercept some portion of accumulated wealth (including retirement accumulations) so that the inequity does not persist for future generations. 401(k)s are a great program for the wealthy and for their children, so we should limit what can be deferred annually well below the current limits. With those and similar moves we could encourage reasonable retirement savings without having yet another mechanism for our nation’s wealth disparity to grow.

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