Why should we perpetuate job-tied retirement benefits? They have some of the same problems as job-tied health care. We need a new version of Social Security that is expanded to include current job-tied benefits.
The smaller the group of employees the higher the risk of a employee incurring unplanned costs--long-term coma in health care, living until 100 in pension. The bigger the group, the easier the cost and risk modeling becomes.
The long term trend has been to replace pensions with the 401k, putting the unplanned retirement risk into the smallest group possible--one employee. This makes for a good current quarterly expense report and for a future disaster.
Employers and employees haven't built up adequate 401k balances. One rule of thumb is that the 401k balance at retirement should equal 8 years of salary. Are you on track? That cushion of real estate profit we anticipated to help us in retirement is either shrunken or gone.
Just as the solution to health care lies in Medicare for All, the pension solution lies in Social Security Plus--a expansion of Social Security to replace private pensions and 401ks.
Both solutions decouple from the current job-tied system that pushes people to work for bigger entities.
We should have the same system for retirement and health benefits regardless of whether you work for Goldman Sachs, for the federal government, for a small business, or for yourself as a carpenter or artist. If you make a lot of money or put more than the minimum into the system, you should get a bigger payout.
How do we get there before the wave of boomers begins hitting the next life crest?
Employees could choose to put portions (all or some) of their existing 401k balance into Social Security Plus, with clearly stated payouts.
Employers could convert their pension plans to Social Security Plus, again with clearly stated payouts.
Social Security Plus payroll taxes would increase to reflect the expanded payout. The cap would be eliminated, and for the first time the Social Security tax would be applied to carried interest and other forms of non-wage compensation.
Where does this revenue stream go, what are the assets? We have a perceived (and perhaps real) concern about leaving it available to politicians to use to minimize the deficit. We need a real lockbox and a pension authority that invests broadly. That would help sell the project.