Recently, the U.S. Treasury said that it is perfectly okay for companies to swindle employees out of their pension by offering one-time payments worth less than the pension that those employees are giving up. The Department of Labor, nominally responsible for protecting workers in retirement plans, said nothing. This isn’t the first time the government stood by as American businesses shifted risks onto their employees and retirees. Treasury and Labor, whose decisions shape the retirements of millions of people, have for years been letting companies offer a one-time payment instead of the lifetime pension they committed to.
The scandal is that the one-time payment doesn’t even have to be equal in value to the pension. It can be worth less—in fact, under rules passed by Congress and regulations issued by the Treasury, it usually is.