Nevin's Data "Points"

 The latest academic “dig” against 401(k) plans? Vesting schedules. More specifically, firms with a combination of high turnover and vesting schedules, which means that workers are leaving behind employer contributions. Or, in the parlance of these new critics, being “robbed.”  I stumbled across this “scandal” in an op-ed provocatively titled, “ This giant pension scandal is hiding in plain sight ,” which, in turn, drew from the points made in an academic paper titled, “ Megacompany Employee Churn Meets 401(k) Vesting Schedules: A Sabotage on Workers’ Retirement Wealth .” The “scandal” is the legal vesting schedules under ERISA, notably the three-year variety in place at certain large, high-turnover employers. The MarketWatch article [i] —and, more significantly, the academic paper [ii]  upon which it is based, see the vesting schedule as part of some orchestrated conspiracy deliberately crafted to “rob” [iii]  individuals of benefits/compensation to ...

Sooner or later as a parent you’ll be told—as you doubtless you told YOUR parents—that “that’s not the way things are now!” It’s a potent retort to whatever social more is at issue because, whether it involves a choice in dress, curfew, or even resumé preparation, our perspectives are often shaped (and sometimes distorted) by our recollection of the way things were for us at comparable points in time. Or, as we must sometimes admit, “the way things used to be.” When it comes to things like working careers, there is a widespread assumption that past generations worked for a single employer for all, or most of his/her working years, and then retired with a pension and a gold watch. In contrast, current American workers are believed to change jobs (much) more frequently. In fact, many champion the defined contribution plan design as a better “fit” for today’s workforce, which—certainly in the private sector—is seen as lacking the kind of tenure necessary to accrue sufficient benefits un...