Ep 88. Wall Street's War On Pensions

The Big Picture season 3 episode 88, titled "Wall Street's War On Pensions," delves into a troubling trend that's emerged in recent years: the diminishing of retirement security for American workers. Veteran financial journalist Barry Ritholtz hosts this edition of the show, which sees him interview a number of experts and analysts to try and get to the bottom of this thorny issue.

The episode begins by examining the history of pensions in the United States. Once upon a time, many employees could expect to receive a defined benefit pension plan upon retirement. This meant that the worker was guaranteed a certain amount of money each month for the rest of their life after leaving their job. However, over time, this system has been replaced by defined contribution plans like 401(k)s. This shift has been profitable for Wall Street, which manages the assets within these plans, but it has put the onus of funding retirement on the individual employee.

It's here that Ritholtz introduces his first guest, Teresa Ghilarducci, an economist, and professor of retirement security at the New School for Social Research. Ghilarducci posits that the rise of defined contribution plans has put too much risk on individual employees, who may lack the resources or knowledge to navigate the complex world of investing. She argues that a return to defined benefit plans would be ideal, but concedes that it might not be feasible given the current political climate.

The show then takes us to Kentucky, where we meet several public workers who are in the midst of a pitched battle to preserve their pensions. Kentucky, like many other states, is facing a pension crisis, with billions of dollars in unfunded liabilities hanging over the state's finances. The workers, who include teachers and police officers, demonstrate to demand that the state legislature honor the commitments made to them.

Ritholtz then speaks to Ted Siedle, a pension expert who has testified before Congress about the problems facing retirement in America. Siedle points a finger at Wall Street firms, which he argues have been systematically looting public pensions for decades. He cites fee structures that favor Wall Street over individual investors, as well as conflicts of interest that force managers to put their own interests ahead of their clients.

The episode also tackles the issue of labor unions, which have been a major force in protecting workers' rights and ensuring fair compensation for decades. However, unions have been under attack in recent years, particularly by conservative politicians, who argue that they are a drain on the economy. Ritholtz speaks to a representative from the Communications Workers of America about the importance of unions in safeguarding workers' pensions.

The final segment of the episode takes us to Texas, where we meet a group of retirees who are trying to hold their former employer accountable for alleged mismanagement of their pension plan. The workers claim that the company, which was once owned by General Electric, made risky investments that ultimately cost them their retirement savings. The case is currently making its way through the courts, and the workers are hopeful that they will win in the end.

Overall, "Wall Street's War On Pensions" is a sobering look at the state of retirement in America today. The show highlights the challenges facing workers and retirees, while also shining a light on some of the powerful forces that are contributing to these problems. However, the episode also offers some hope, by showcasing the efforts of workers and advocates who are fighting to ensure that retirement remains a secure and achievable goal for all Americans.