Mama, what’s a pen­sion plan?

Tri-County Vanguard - - OPINION - Rus­sell Wanger­sky Rus­sell Wanger­sky’s col­umn ap­pears in 36 SaltWire news­pa­pers and web­sites in At­lantic Canada. He can be reached at rus­sell.wanger­sky@thetele­gram.com — Twit­ter: @wanger­sky.

Cut out or print this col­umn, put in an en­ve­lope, and come back to it in 15 years.

Be­cause then the chick­ens will re­ally be com­ing home to roost. And for most of us, there will be no stop­ping it.

When I started in the me­dia in 1984, I was paid peanuts. Twothirds of my pay went just to pay rent and util­i­ties, and a monthly trip to McDon­ald’s was a treat.

But what I did have, and didn’t ap­pre­ci­ate, was ex­cel­lent ben­e­fits. A de­fined ben­e­fit pen­sion plan — along with health, den­tal, phar­ma­care and vi­sion care that was 100 per cent paid by my em­ployer, with no de­ductible.

It didn’t make me any richer, but it sure dealt with any fi­nan­cial health sur­prises that might pop up — and I was young enough that I didn’t re­ally ap­pre­ci­ate it.

Things changed, jobs changed. Ben­e­fits got whit­tled away. Ba­sic com­pany health plans be­came pro­gres­sively more ba­sic, pay­ing less of the real costs in­volved. ( Some­one some­where in the in­sur­ance busi­ness thinks $125 is all that glasses should ever cost.) De­ductibles rose. Add-on plans, where you could pay more for bet­ter ben­e­fits, got more ex­pen­sive. Sev­er­ance terms were al­tered, usu­ally set­tling around the ab­so­lute min­i­mum amount re­quired by pro­vin­cial law.

Most sig­nif­i­cantly, de­fined ben­e­fit pen­sions be­came com­bined de­fined ben­e­fit/de­fined con­tri­bu­tion plans, and then, just de­fined con­tri­bu­tions.

I know I’ve talked about this be- fore, but the reck­on­ing is com­ing.

My gen­er­a­tion is the one on the cusp, the ones with a foot in both doors, the one that watched pri­vate busi­ness walk away from guar­an­teed pen­sions.

I un­der­stand why it hap­pened; I’ve worked for a pub­licly traded com­pany or two where quar­terly re­sults were cru­cial, where an­nual re­sults were the Holy Grail, and the com­pany’s health five years down the road didn’t mat­ter, be­cause, with ex­ec­u­tive churn, that would prob­a­bly be some­one else’s prob­lem.

Get­ting out from un­der the bur­den of po­ten­tially hav­ing to pay pen­sions was a magic bul­let: mil­lions of dol­lars of con­tin­gent li­a­bil­i­ties vanished off the books, and you could tell your em­ploy­ees that it was all good news — that you were giv­ing them full con­trol over their own fu­ture. Kind of like kick­ing you off the bus in Amherst, N.S., but telling you it was great, be­cause you now had the op­por­tu­nity to find your own way to Win­nipeg.

That great trans­fer of fis­cal re­spon­si­bil­ity from em­ployer to em­ployee is one of the great­est thefts em­ploy­ers have ever done to their staff. We’re the pen­sion guinea pigs.

There are, of course, peo­ple who will still do well; pen­sions in the pub­lic sec­tor chug along, giv­ing re­tirees a much bet­ter shot at a ba­sic stan­dard of liv­ing.

There are also those with the knowl­edge and skill to par­lay their self-di­rected re­tire­ment fund into big­ger things.

There are also many peo­ple who are go­ing to do much worse. Many, many, many peo­ple. It will prob­a­bly get even worse. Peo­ple talk about the mod­ern gig econ­omy, about shift­ing from tem­po­rary job to tem­po­rary job, never point­ing out that those jobs of­ten have no ben­e­fits at all.

But young peo­ple still have time to make sure they save, you might ar­gue.

They might — re­mem­ber, though, that at 22, I had great ben­e­fits and no real idea how good they were, or that I would ever need them.

Gov­ern­ments might be con­cerned about all of this, ex­cept for the sim­ple fact that they are also fo­cused on short-term re­sults — their re-elec­tion.

They, of course, also have de­fined ben­e­fit pen­sions, rather that de­fined con­tri­bu­tion ones.

It’s like hav­ing mil­lion­aires telling you not to worry about pay­ing your elec­tri­cal bill.

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