Long ago our nation had what was defined as employment loyalty. You would apply for and was given a job, and in return for your long years of devoted service, you would receive a pension. During the critical period of The Great Depression many of those pensions were wiped out because of banks, companies and investments failed. Thus the creation of the social security retirement system was created. Over time those pensions would return and so would employment loyalty. But like any good thing some financial planners came up with the plan to create a 401K system to augment the rich pension scheme. In fact, when the 401K system at the height of its popularity we witnessed the end of the pension system as we know it. Today most Americans rely on a social security retirement plan combined with a solid 401K plan. But that is about to change once again.
The financial crisis of 2007-2008 triggered another Great Recession moment where many 401K investments were wiped out in minutes. Pension systems were no longer available because of collapsed companies. Social security experienced a large impact because those that lost both 401K investments and pensions immediately applied for social security claims. The dominoes were starting to fall all around with the worst-case scenario that social security wouldn’t have enough funds for future retirees. To make another case and point about how employment loyalty changed is that most companies had its health plans that were passed on to employees. The intended use method was companies would continue to furnish health policies to its employees and those without health insurance would qualify for the Affordable Health Care Act subsidies or universal coverage. Instead, companies began to dump health plans leaving a majority of the American public at the mercy of shopping for a plan. Then companies began to halt pension programs to save more money. Today companies are starting cut 401K plans and leave these matters up to banks or investment firms to save more money. The human resources department in companies is no longer human. It’s a trail without crumbs or a path to find the best possible outcome or plan for the future. Sadly, companies are no longer seeking employment loyalty. Otherwise, it wouldn’t lay off its oldest workers to save from investiture or qualifying for retirement schemes.
What is our future with retirement? Banks ask that we begin saving more, but banks are the ones that failed our investments causing a collapse in our savings and trust or charge us fees to manage and administer it; if that fails banks no longer offer that service because “lack of popularity” excuse. Insurance companies want our business but deny claims based on its interpretation of policy or generally because it wants to cut corners; if all else fails they sell to another insurance company to change the game and system standards. Social Security once the third anchor of retirement looms an imminent death because politicians don’t know how to keep its hands off that portion of the money. What will retirement look like in our future? That should be a question we begin to tackle today and start to ask corporations seeking tax havens and golden parachutes for its executives rather than keeping the company reliable for all that were loyal to it. This is a fundamental reason, I believe, that employees no longer desire to have a strong work ethic or commitment to an organization. As long as companies giveth and taketh away, then it will continue to leave a sour and unpleasant taste in the mouths of those that once believed in a strong organizational standard.
I am curious as to a prime example of Google or Apple corporations on how its retirement system operates? After all, each organization has billions of dollars in excess revenue cash stored away in banks abroad. Why not provide a universal health care plan, 401K, and a pension scheme from day one? The same could be said for Exxon, IBM, General Electric, Wal-Mart, VISA, eBay, McDonald’s, Amazon, Cisco, Pepsi, and many mega companies that seem to cut corners at the expense of Americans and loyalty. They may be the very reason 401K plans are eventually going away.