Unfortunately, the decision by General Motors Co. to freeze its plan marks another bad day for retirees in this country (P&I Daily Feb. 15 and Pensions & Investments Feb. 20).
Portability should mean very little to participants who don't have the skill to invest their assets. As you know, most participants in defined contribution plans don't contribute nearly enough to fund their retirements and their investment decisions tend to be poor, often buying yesterday's performance.
With only about 16% of the workforce covered by a defined benefit plan, we are facing a crisis that might be greater than any concerns associated with Social Security or Medicaid/Medicare. What are the 77 million baby boomers going to do when they don't have a monthly check and they have inadequate 401(k) balances, little personal savings, no home equity, and Social Security payments that barely cover one's property taxes?
As a retirement industry, we need to support defined benefit plans. They need to be managed more effectively to reduce cost to the sponsor so that we can have our workers retire with dignity and a monthly check that will enable them to retire, while keeping them from becoming a burden on the government or their children.
Kamp Consulting Solutions LLC
Midland Park, N.J.