Will 2014 turn out to be a good year for pension stability? A good year for the growth of wealth through pensions? Maybe yes. Maybe no. In the end, it seems to come down to which lens you view the situation through. The economic lens or the political lens.
If a market observer were to take a look at the data that's been coming out in the past weeks, he or she would have every reason to be optimistic. There's been a slew of good news. One of our headlines read: Corporate pension plan funding ratio up 3 percent. Another proclaimed: Corporate pension plans' funded status highest since '07.
That's cause to exhale right there. The Fed proclaims 2014 the year of the taper. And just a week ago, an update announced that the funded status of country's largest pensions jumped 16 percentage points.
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But wait. It turns out that some of those developments represent only one side of the pension point of view. For every upbeat story about pension stability, there's another reporting that some private employers – like Teamster members – and municipalities are in crisis over the same issue.
You know the headlines: Pensions will cause private and public institutions to crumble under their own weight if remedies aren't taken immediately. The documentation is absolute: Detroit, the Midwest, California municipalities. New York City tabloids are battling to write the more inflammatory story that reports on the inevitable shootout between Mayor Bill de Blasio and the unions.
Dire forecasts vs. sighs of relief. Who's right? Perhaps both points of view are. Which is to say, perhaps it's not a one-lens-fits-all solution.
Maybe it's as simple as old contracts putting a stranglehold on management at some companies while managers at other firms invested imaginatively and yielded magnificent results for their employees.
On the other hand, maybe noble union leaders struggled mightily with their notions of the right thing to do before yielding precious points at company A while greedy management just squandered funds at company B. It seems to me the situations should be viewed case-by-case.
The answer? Well, better men and women than I are trying to make this right. That doesn't stop me, however, from suggesting that makers of both the good and bad news form a public-private partnership charged with creating policy that legislators could adapt as loosely or tightly as they saw fit, depending how far the lobbyists let them.
You see, I don't think pensions in the next 10 to 20 years will be the panacea everyone hopes they will be or the disaster everyone fears they could be. But I do believe there are elements of a number of retirement programs that we can all learn from (learn what to do and what not to do) that could serve well the concerns of many retirement programs.
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