Having a pension
plan has been part of the American Dream for millions of workers. Put in thirty
or thirty-five years with a company, retire, and then the company will send you
a check every month for the rest of your life—an attractive prospect. The
amount of the check is pre-determined. It is a “defined benefit” promised to
the worker.
Unfortunately,
this simple vision has proved difficult to implement. The basic problem has
been that pensions are a promise for the future, but nobody can guarantee the
future. In our dynamic economy, the Schumpeterian process of “creative
destruction” relentlessly weeds out the companies that no longer meet
consumers’ most valued desires. As a result, one can work for a company for
several decades, then see the company go broke, shut down, and—poof!—there goes
the pension…..To Read More….
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