This Week in Pensions

This Week in Pensions: April 19, 2024

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Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.


The tragic loss of six lives in the wake of the Francis Scott Key Bridge collapse has cast national concern on workplace safety, particularly for dangerous manual labor occupations, such as night road construction crews. Compounded with an ongoing labor shortage and the disruption of a vital economic artery, the Key Bridge collapse presents an emergence of complex challenges. Read our latest blog, Navigating Maryland’s Labor Challenges in the Wake of Tragedy, for insights on this pressing issue.

401(k)s Benefit the Ultra Wealthy, Ultra Powerful the Most

Politico released a special report this week, ‘The 401(k) industry owns Congress’: How lawmakers quietly passed a $300 billion windfall to the wealthy. The report joins the chorus of pension advocates who have been sounding the alarm about 401(k)s and the harm their popularity has caused to the American retirement system. 

The passage of Secure 2.0, a federal bill that provides several retirement initiatives, including “a nonrefundable credit for certain individuals who make contributions to individual retirement,” was hailed as a success by Republicans and Democrats. However, Secure 2.0 has increased both wealth disparities and the federal deficit. It has also grown the financial services retirement market from $7 trillion in 1995 to a “$38.4 trillion behemoth in 2023.”

“Tax-advantaged savings has become a staple of the American retirement system,” the article reads, “with 60 million savers squirreling away $6.6 trillion in their 401(k)s, alone. However, a yearlong POLITICO investigation found that Secure 2.0 and its predecessor bills expanded the system well beyond its goal of helping the middle class. Today, wealthy taxpayers can protect up to $452,500 per year in tax-advantaged accounts in a single year, saving up to $203,600 on their taxes.” The question Politico wants to know is why would Congress continue to provide tax breaks for retirement savings that disproportionately help the wealthy while increasing Medicare costs and reforming Social Security, which are lifelines for retirees who have come from the lower and middle classes. As we have noted in the past, Wall Street interests play a particularly nefarious role in diminishing retirement security for millions of Americans. 

The Boomer Wave is Here

As the youngest members of the Baby Boomer generation prepare to enter retirement, they’ll bring with them far less in retirement savings than they’ll need to stay afloat. 

The latest Alliance for Lifetime Income’s Retirement Income Institute report found that only one-third of the last wave of Boomer retirees is financially prepared to stop working. Known as “peak boomers,” there are 30.4 million Americans who will turn age 65 between 2024 and 2030, causing what some have called “the boomer retirement bomb.” The 52.5% of peak boomers who have $250,000 or less in assets will likely deplete their savings and rely primarily on income from Social Security in retirement. The 14.6% with $500,000 or less will also likely deplete their savings long before the end of life. Peak boomers are also expected to spend $204 billion less in 2032 than in 2022, which will significantly impact the economy. 

The report also concluded that defined benefit pensions have the least disparities along racial, gender, and ethnicity lines, but only 24% of peak boomers have them. “The saving grace for some Peak Boomers is that they can count on the added protected income that a pension provides in retirement,” said Jason Fichtner, Executive Director of the ALI Retirement Income Institute and Chief Economist at the Bipartisan Policy Center. “However, since only 4% of all private sector workers had protected income from a pension as recently as 2020, this economic study of Peak Boomers should be a cautionary tale to all Americans planning for retirement.”

Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.