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Once upon a time, not so long ago, about a third of all American workers had a gold-plated pension: When they retired, someone paid them nearly their full salary for the rest of their lives. They didn’t have to worry about the market, or inflation, or running out of money.
That time did not last, in large part because the someone who was paying for those pensions realized how expensive they were and how much risk they carried. So employers and governments around the world tried something different: Individual retirement accounts, which required everyone to manage their own risk.
The main attribute of this new system has been to clarify all the problems of the old one — and to create some new ones, too. And the Trump administration’s proposal to remedy these new problems incorporates some of the worst features of the old system.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.