Saturday, February 8, 2014

Cut Social Security? Great! Slash 401(k)'s? Beautiful!

Tim Armstrong: I worked at Google for years. Maybe I was a dick then, but now that
I'm at AOL, I'm really a dick. I'm auditioning for the Billionaire Baby Boys Club.

Some people just have a penchant for screwing up good news. While AOL CEO Tim Armstrong reveled in the good news about rising profits, he felt it was a good time to slash 401(k) contributions. What's more, he thought he'd complain about a couple of expensive unhealthy babies born to employees and how poor AOL was on the hook because of the healthcare benefits they offer. Awwwwwh.
It should have been a glorious week for AOL chief executive Tim Armstrong. His company’s quarterly earnings, announced Thursday, were the best in a decade. “Olympian,” he declared.
Instead, he angered employees, insulted parents with sick babies and shined a light on a practice seeping its way into corporate America that threatens to rob workers of thousands of dollars in 401(k) savings.
The strange turn of events began Tuesday, when employees began learning that AOL was switching its 401(k) match to an annual lump sum, rather than distributing the money throughout the year with every paycheck as it had done before. Only employees who remain at the company through Dec. 31 are eligible, meaning that anyone who leaves midyear won’t see any of the pay.
A number of companies, including Deutsche Bank and IBM, have been cutting their retirement benefits this way, saving millions of dollars just as more Americans are relying primarily on their 401(k)s because traditional pensions are being phased out.
 Corporate earnings have been soaring lately, so it's a perfect time to slash spending on pensions and those pesky 401(k)'s. Americans! What makes them think they deserve to retire??

BTW. Atrios at the Eschaton blog (aka Duncan Black) has written in the last year that the 401(k) is essentially a failed replacement for the defined benefit pension that has effectively disappeared from the private sector. But, hey, we've got Social Security. Oh, I forgot, that's been targeted by Republicans, Fix the Debt, and Bowles/Simpson, you know, all the Very Serious People.

The rich won't be happy until they have it all. And that's not hyperbole. Actually, Fix the Debt members could be considered charter members of the Billionaire Baby Boys Club.

Mommy, they're trying to take my billions away! Make 'em stop!

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