Institute Talk: A Conversation About Retirement Insecurity with Katherine Newman

Katherine Newman, the interim chancellor of the University of Massachusetts Boston, has devoted much of her career to documenting conditions facing poor and working-class Americans. Her new book, Downhill From Here, Retirement Insecurity in the Age of Inequality, examines the perilous state of retirement in the United States. Gerontology Institute Director Len Fishman recently talked with Newman about the dangers facing the pension system, Social Security and other forms of economic support for Americans as they grow older. The following is an edited version of their conversation.

 Len Fishman: Your book reads in part like a post-mortem of the defined benefit pension system. Defined benefits provide a fixed pre-established benefit for employees at retirement, usually based on length of service and salary. They hit their high-water mark in 1980 and then plummeted. What happened?

Katherine Newman: Union density began to decline sharply at the same point. The defined benefit pension system is very much a creature of the collective bargaining power of unions. That’s why defined benefit systems tended to exist mainly where there were unionized workers. And as union density slipped — in part because of deregulation and industry competition – the strength behind the defined benefits began to shrink. Today, a very small minority of Americans have what we would call true pensions – 401(k) plans are definitely not pensions in terms of security and employer responsibility for investment. Continue reading

PAC Case Study: Helping a Widow Secure Survivor Pension Benefit

The Gerontology Institute’s Pension Action Center is part of  the McCormack Graduate School at UMass Boston. It provides free legal assistance to low- and moderate-income workers, retirees and their survivors in the six New England states and Illinois whose pension benefits have been wrongfully denied. This is one in an occasional series of posts about cases the center pursues on behalf of its clients.

A 67-year old widow from Charlestown came to the Pension Action Center with a sad story and a serious problem. Her husband had worked cleaning offices as a member of the Service Employees International Union for over 30 years. But union pension fund officials told her she was not entitled to a survivor’s benefit as a result of his sudden death – just one day after signing forms to begin receiving his pension. Continue reading

A Response to Aggressive Pension Plan Recoupment Practices

Brendan Jones went to work for a Connecticut manufacturing company straight out of high school and stayed until the plant closed more than three decades later. Once he turned 55, Jones began collecting a monthly pension check of $123.79. No one knew it at the time, but that was a serious mistake.

Twelve years later, in 2010, the pension plan informed Jones (not his real name) that it had made a calculation error from the start. His true benefit was just $82.53 per month and the plan wanted the past excess payments back. Its solution took the money from future payments and the pension Jones received for more than 30 years of work was cut to $24.78 per month.

Jeanne Medeiros, director of the Pension Action Center at the University of Massachusetts Boston, and Boston University law professor Maria O’Brien Hylton point to the Jones case as a clear example of a growing trend – aggressive efforts by pension plans to recoup past overpayments to beneficiaries who did nothing wrong and were never aware of a problem. Continue reading