Before there was such financial vehicles as social security, pensions, 401K's, IRA's, and mutual funds, people were expected to be responsible for their own retirements and nest eggs. But with Wall Street using many of these instruments as a way to deceive the public into handing over their money to bankers for upwards of 30-40 years of their working lives, individuals became lax in trusting that corrupt institutions would look out for them and follow through with the preparing for their golden years with security.
The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said. At that time, pension benefits for about 407,000 people could be reduced to "virtually nothing," he told workers and retirees in a letter sent Friday.
In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers.
The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.
The fund could submit a new plan, but decided this week that there's no other way to successfully save the fund and comply with the law. The cuts needed would be too severe. - CNN MoneyThe bottom line is that 2008 was a warning shot to Americans relying upon pensions and other savings instruments to fund their retirements. And for those who willingly cashed out when they could despite the penalties, many were able to move that money into tangible wealth protection such as gold, silver, and precious metal based IRA's. But sadly, the majority of people continue to trust Wall Street, and this week's insolvency for the Central States Pension Fund will only be the beginning of many more collapses to come.