Correlation: No pension == no loyalty?
Had a fascinating conversation with Chuck the other day, where he said:
This got me thinking: Today, if you're lucky you have some employer-matching, tax-deferred retirement plan, like a 401(k), 403(b), SIMPLE, ABC-XYZ-Dooflatchie. These plans are all portable--quit or get laid-off, and you take the money with you.
From a corporate perspective, this moves legacy costs off the books. once you've contributed to the plan, your obligation ends, and the employee and the servicing company (say, Fidelity or Vanguard) handle the rest. This is A Good Thingtm.
But, is there an unintended side effect? Does this make employees more willing to move when tough times hit.
The best thing that ever happened to me is when they cut out my pension
This got me thinking: Today, if you're lucky you have some employer-matching, tax-deferred retirement plan, like a 401(k), 403(b), SIMPLE, ABC-XYZ-Dooflatchie. These plans are all portable--quit or get laid-off, and you take the money with you.
From a corporate perspective, this moves legacy costs off the books. once you've contributed to the plan, your obligation ends, and the employee and the servicing company (say, Fidelity or Vanguard) handle the rest. This is A Good Thingtm.
But, is there an unintended side effect? Does this make employees more willing to move when tough times hit.
ABSOLUTELY!!
ReplyDeleteWhen I started at the credit union, retirement benefits included 100% pension with 100% healthcare costs covered.
As soon as the first people retired (5 in one year, four years ago), they cut retirement for everyone, changing it to 50% pension from the average of your last 5 years of salary with no healthcare costs covered, including cutting the healthcare coverage for the 5 existing pension recipients. Granted most companies offer no pension (their excuse and main bragging point during transition) but it definitely negated any niggling loyalty I had to the CU. If a company's not going to offer retirement benefits, in addition to treating you like crap while you're there, why bother to stay?