Archive | August, 2019

Half of California private sector has no retirement savings – is this a surprise?

1 Aug

Sitting in the tire shop this morning, I picked up a dog-eared copy of the Enterprise Record and saw the headline, “Half of California workers have no retirement savings, says UC Berkeley report”.

I didn’t have time to read it, so I jotted down the source – the Center for Labor Research and Education.

The report did not surprise me –  “It turns out that California private sector workers are not merely behind on saving for retirement; half do not own retirement assets and most are currently not saving for retirement at all.

Nor did the “why” surprise me – “About 7.4 million California private sector employees age 25-64, or 61%, do not have access to an employer-sponsored retirement plan.”

That’s so funny, isn’t it? We pay for public employees to have defined benefit plans, but in the private sector we’re fending  for ourselves.

The real story here is “the State of California is launching a large-scale effort to help fill the retirement savings void: CalSavers, an automatic retirement savings program for private sector workers in firms with five or more employees that do not offer a pension or 401(k).”

‘Scuse me, but BIG WHOOPEE.  It certainly isn’t 70 – 90 percent of your highest year’s earnings at age 50. The employer doesn’t contribute, and it’s only 5% of your paycheck unless you can afford more.

Employers serve a limited role: facilitate the program and submit participating employees’ contributions via simple payroll deduction… Employers cannot make contributions”  An employer registers his employees, and unless they opt out, 5% of their pay will be automatically directed into a “savings account”. The employee is allowed to contribute more if they’d like, sure, but the people who need this program the most are the ones who can’t afford to contribute much. 

This illustrates the economic divide between public sector employees – The New One Percent – and the rest of us. Public employees get defined benefits, we get whatever we can afford after we pay for their defined benefits. We are paying higher and higher taxes to provide for them, and their spouse who lives beyond them, out of our shrinking salaries. We have to pay for our own healthcare, while providing healthcare for public employees and their families. These people make in excess of twice the medium income, but expect us to pay their freight.

That’s just funny, and I mean funny weird, not funny ha-ha.