Re-Indexing Public Pensions

The topic of Illinois' various insolvent pension systems is not news to regular Zero Hedge readers.

Faced with a $10-billion pension-funding deficit, one of Canada’s largest pension funds is considering a drastic proposal that would reduce benefits paid to retiring workers — or force them to work years longer for the same retirement income.

Given some of the abuses suffered by customers of the banking and financial services industry, no person of reasonable intelligence would deny there’s a place for an external body to resolve bank-related disputes. In 1996 Ottawa set up such a body, the Ombudsman for Banking Services, to perform such a task, a task undertaken after the client and an institution have tried but failed to reach a satisfactory result.

The retirement savings crisis in America is so acute that at least one prominent thinker on the subject is calling for a mandatory savings program above and beyond existing 401(k) and other pension plans. “The nation requires a new, mandatory tier of retirement accounts, initiated by the federal government but managed by the private sector, that will replace about 20% of pre-retirement earnings,” Alicia Munnell, director of the Center for Retirement Research at Boston College, told Bloomberg News.

The Roth IRA is one of the most talked about and least understood financial tools.

It may seem churlish to hector the New York Times for turning its attention to the sorry financial prospects of the young. But this sort of attention would be more useful if it shed more light, rather than wistfully evoking standards from the old normal.

Social Security has gone from being a minor supplement for workers who had already made their own arrangements to save for their old age to the key financial support for tens of millions of retirees. With so much riding on your benefits, you can't afford to make any mistakes with your Social Security.