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Trump Is Helping Wall Street Make Money From Vulnerable People’s Pensions

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The policies of the administration of President Donald Trump seem to get more and more horrifying by the day. Whether it be blatant racism, horrifying misogyny, outrageous transphobia, prejudice against disabled people or hatred of journalists, Trump has excelled in marginalizing every possible vulnerable group in society during his time so far as President of the United States and leader of the free world.

His latest piece of reform legislation might be the worst one yet. He is making it easier for Wall Street to cheat vulnerable retirees out of their own pensions in order to make a sleazy profit, totally shamelessly:

The Trump administration has quietly rolled out a technical change to current Treasury Department policies that will allow corporations the leeway to alter their existing pension arrangements. The move, announced in early March, puts the private sector retirement benefits that millions of Americans have earned at risk.

The change allows businesses to offer retirees and their families a one-time payout to replace the monthly or yearly pension checks they currently receive. Such lump-sum buyouts can be tempting for older beneficiaries, who generally underestimate their life expectancy. As such, these one-time payouts often fall far short of what they might otherwise be due under their existing pensions.

“It’s not that people are greedy, it’s that they’re afraid,” Economic Policy Institute (EPI) retirement expert Monique Morrissey told ThinkProgress. “And they have no way of evaluating this. They believe they’re being protected and they’re not.”

Though the large numbers involved in a lump-sum offer can look generous on paper, recipients often suffer from a lack of context and comparison when evaluating their choices. Researchers have found that such buyouts almost always cheat retirees, costing them a significant amount of money when they are compared to the proceeds to which they would have been entitled under their original pension or even a privatized annuity system.

The difference is big enough that when the Obama administration had the opportunity to act, the Treasury Department issued rules which effectively banned firms from offering such buyouts. “It really is a rip-off for workers,” said Amy Traub, a researcher for liberal public policy think tank Demos.

“There may be somebody out there who’s telling them they can manage the money far better than the old pension plan ever would have, but in practice that’s not true, and people run out of money quickly compared to the lifelong guarantee they had from their pensions.”

This is disgusting, and the American people will not put up with it for much longer.


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