evince
Truthmatters
http://www.washingtonpost.com/blogs...ng-inequality-worse/?wprss=rss_national&clsrd
401(k)s are replacing pensions. That’s making inequality worse.
The once-dominant defined benefit pension plan–which pays out a fixed amount after an employee retires–is on its way to becoming an historical artifact. More and more employers are offering 401(k) plans instead, which require employees to pay into their own accounts, sometimes with and sometimes without a matching contribution. And according to a new analysis from the labor-oriented Economic Policy Institute, the effect has been a stratification of retirement savings by education, income, and race–which could deepen inequality among the elderly as the population ages.
It’s actually possible to tell a positive story here, in which the average size of retirement accounts has grown overall in recent decades, and aggregate saving and household net worth as a percentage of income have started to bounce back since the recession first hit in 2008:
But the moral starts to change as you look underneath the numbers. Those benefits split among a smaller share of the population: Overall, the percentage of workers participating in all employer-based retirement plans declined over the past couple decades, across all age groups.
401(k)s are replacing pensions. That’s making inequality worse.
The once-dominant defined benefit pension plan–which pays out a fixed amount after an employee retires–is on its way to becoming an historical artifact. More and more employers are offering 401(k) plans instead, which require employees to pay into their own accounts, sometimes with and sometimes without a matching contribution. And according to a new analysis from the labor-oriented Economic Policy Institute, the effect has been a stratification of retirement savings by education, income, and race–which could deepen inequality among the elderly as the population ages.
It’s actually possible to tell a positive story here, in which the average size of retirement accounts has grown overall in recent decades, and aggregate saving and household net worth as a percentage of income have started to bounce back since the recession first hit in 2008:
But the moral starts to change as you look underneath the numbers. Those benefits split among a smaller share of the population: Overall, the percentage of workers participating in all employer-based retirement plans declined over the past couple decades, across all age groups.
