Tuesday, August 11, 2009

Summers Speaks on Retirement Savings Winter

White House Chief Economic Adviser Larry Summers spoke from the National Press Club. CSPAN marketed the talks with:

Facing the influx of retired baby boomers and a lagging economy, the Social Security Admin. reported that their costs will exceed tax revenues in 2016, and the trust funds to allocate benefits will be exhausted in 2037. White House Economic Advisor Larry Summers goes over these and other issues threatening retirement security at the 11th Annual Retirement Research Conference.
I caught a portion of his remarks. He said policy makers were shifting to a target savings rate as a key measure. He forecast the decade (from now) will be the most influential since the 1930's.

In the Q & A he addressed defined benefit plans vs. defined contribution plans. Defined benefit plans are rare, with most employers having switched to non-pension retirement benefits, 401(k)'s and 403(b)'s. Many eliminated the corporate match, leaving employees alone in funding their non-Social Security retirement.

Is it coincidence that Larry Summers talked about retirement the day after the Bipartisan Policy Council called for immediate reform to Medicare and Social Security?

When Larry Summers went off, CSPAN shifted to President Barack Obama's health care town hall meeting. Employers want to do to health insurance what they did to defined benefit pension benefits, shift the burden to the individual.

Corporacrats in the White House and Congress will grease the skids for this shift. Health insurance will be dumped to the individual faster than the two decade long period of the defined benefit pension dump. It might happen in the pivotal decade highlighted by Mr. Summers.

America needs a "savings rate" for the individual to shoulder the numerous future burdens. Corporations and their elected lackeys will not do so transparently.

No comments: