Understanding Retirement Policies: A Primer

Most of the significant policy issues associated with retirements and pensions in the United States today hinge on the relative responsibilities of Government, employers and employees in providing for the well-being of workers and their families after they retire. These three interconnected sources of retirement income are all governed by Federal legislation and statutes, each of which offers its own issues, opportunities and challenges. I’ll briefly review each of the three and provide an overview of the policy considerations involved with each.

Government Funded Programs: The Federal Government provides social insurance programs under the Social Security Act of 1935, as amended, and as implemented in Title 42, Chapter 7, of the U.S. Code. These programs originated in the Great Depression, when over 50% of elderly, retired people in the United States lived in poverty.

Title 42, Chapter 7 governs a variety of social insurance programs (including Medicare, Medicaid, TANF, etc.) , though when we use the term “Social Security” we are generally referring only to the Old Age, Survivors and Disability Insurance (OASDI) program. OASDI provides monthly benefits to retirees, dependants, widows, spouses, divorced spouses and disabled workers. In the United States today, workers contribute via mandatory payroll deductions under the Federal Insurance Contributions Act (FICA), which are then matched by their employers.

These funds are held in, and dispersed from, the Social Security Trust Fund. OASDI is a “pay as you go” program, meaning that today’s workers pay for today’s retirees, not for their own future retirements. The problem with this approach in the United States today is obviously a demographic one: the ratio of current workers to retirees is decreasing rapidly as the baby boom generation reaches retirement age, and people are living longer as birth rates decline. By most forecasts, if nothing changes, the Social Security Trust Fund will run dry sometime between 2030 and 2040.

None of the policy options available to remedy this situation are likely be popular among voters (e.g. suspend the program, allow private employee-directed investments, reduce benefits, increase minimum retirement age, raise Social Security taxes, borrow to pay OASDI benefits, make riskier investments with the trust fund in the hopes of increasing investment gains, etc.), hence the decisions tend to just keep getting deferred. This is one of the most profound socioeconomic issues facing our country today, especially as other entitlement programs grow and expand.

Employer Funded Programs: The traditional employer funded pension was a defined-benefit plan, in which employees, in exchange for set periods of employment, were granted certain payments and benefits for the remainder of their lives after they left the work force.

Defined-benefit plans are rapidly dying out everywhere except for in Government and larger, older, more unionized companies and corporations. They are being replaced with defined-contribution plans, like 401(k)s, where employers, employees or both make contributions that go into individuals’ retirement accounts.

The most important piece of legislation governing employer or employee funded programs is the Employee Retirement Income Security Act of 1974 (ERISA), as amended. ERISA was designed to protect the interests of pension plan participants by requiring disclosure of information concerning plans and by establishing standards of conduct for plan administrators.

ERISA also established the Pension Benefit Guaranty Corporation (PBGC), an independent Government agency designed to provide uninterrupted pension benefits in cases where employers can no longer meet their obligations to their retired employees. The Pension Protection Act of 2006 sought to strengthen the PBGC and ERISA in general by eliminating loopholes and penalizing companies that under-fund their pension programs.

Defined-benefit plans are also typically “pay as you go” type arrangements, and they have run against the same sorts of demographic pressures that assail Social Security. From a government policy standpoint, lawmakers must balance provisions that protect employees with realistic assessments of what businesses can bear; if the government mandates pension provisions that bankrupt businesses and cause all of their employees to lose their jobs before they get a chance to retire, has the net utility to society been increased?

Employee Funded Programs: Given the resource pressures noted above, the Government and businesses have a vested interest in encouraging employees to help fund their own retirements.

In addition to ERISA, the Internal Revenue Codes of 1954 and 1986, as amended, are the primary laws influencing employee funded programs, as they provide tax incentives for employees to set aside funding for their retirement; “401(k),” for example, refers to a chapter in the tax code.

Employees may contribute to defined-benefit plans such as 401(k)s that are sponsored by employers, or they may contribute to individual retirement accounts (IRAs); there are several different types of IRAs (Roth, Traditional, SEP, Simple, etc.) that have different tax provisions associated with them.

As originally constituted, IRAs were essentially cash vehicles, but the Economic Growth and Tax Relief Reconciliation Act of 2001 made it easier to use other types of assets to fund retirement accounts.

From a policy-making standpoint, lawmakers must balance a desire to have employees fund their own retirements with a realization that the tax incentives being offered to encourage such investment also results in reduced tax revenues to the federal government; it would be simple to write tax law that would encourage employees to dramatically increase their contributions, but that would dramatically increase the budget deficit by lowering revenues.

Recommended Further Reading:

  • The Coming Generational Storm: What You Need to Know about America’s Economic Future, by Laurence J. Kotlikoff and Scott Burns, MIT Press, 2005.
  • Coming Up Short: The Challenge of 401(K) Plans, by Annika Sunden and Alicia Haydock Munnell, Brookings Institution Press, 2004.
  • Fundamentals of Private Pensions (Eighth Edition), by Dan McGill, et al., Oxford University Press, 2005.
  • The Economics of an Aging Society, by Robert L. Clark, et al., Wiley-Blackwell, 2004.

The “Favorite Band” Question

NOTE: See this post for a 2019 update on this biggest of musical questions.

For as long as I have been a sentient being, music has stood as one my most primary passions: I love listening to it, thinking about it, writing it, recording it, reviewing it, and just generally reveling in it holistically in a whole-body fashion. Good music makes me vibrate psychically and physiologically to the very core of my being. It moves me, and how.

People with any personal connection to or familiarity with me generally are acutely aware of my musical obsessions, and if they themselves are musically inclined, they will often seek to engage me on the topic one way or another, typically with the fairly predicable opening question: “So . . . who’s your favorite band?”

Oddly enough, I find that question terribly difficult to answer, since I feel like picking one band above all others will somehow render me more musically one-dimensional than I wish to appear, conversationally or in other people’s mental images of me.

My stock answer to the question for many, many years has been “I like to listen to anything done well.” On the one hand, that’s a facile answer. But on the other hand, it does accurately capture the omnivorous nature of my listening habits. Looking at my iPod play list, just this afternoon, I listened to jazz (Charles Earland), grindcore (Napalm Death), contemporary folk-rock (Frontier Ruckus), classic rock (AC/DC), indie folk from Iceland (Sin Fang), country (Dolly Parton), progressive rock (Jethro Tull) and hard industrial hip-hop (Dalek). And I liked all of it. Seriously.

But if I were to try to answer that question in a more conventional manner, the first thing I would have to do would be to figure out what “favorite band” really means, since I don’t think in such terms normally. To receive such an encomium, I would expect that a listener’s relationship to the artist in question would include such factors as:

  • The listener actively looks forward to listening to the favorite band’s music more than any other music, and does so weekly, if not daily;
  • The listener seeks to have a complete collection of the favorite band’s work, and is willing to spend a little bit more money than usual to acquire it, with special attention paid to albums or singles that less-enthusiastic fans might never find or hear;
  • The listener never grows tired of the favorite band and its works, and anytime they come on the stereo or radio, no matter what the song, it is greeted with volume raising and singing along;
  • The listener seeks to learn more about the favorite band, and will often buy books or magazines or watch television or internet shows related to its members and their music;
  • The listener makes an effort to see the favorite band in a live setting as often as practically possible.

When I apply such a filter, and look back at my music listening life, I can see different bands have met those criteria at different times. In some cases, I’ve loved a band during the time when they were generally considered to be producing their most seminal or formidable work. In other cases, I’ve gotten into bands long after their creative heydays, but have been just as obsessed by them as a Johnny Come Lately as I would have been had I been Johnny on the Spot, discovering them when they were fresh.

If I discard short-term passing fancies, and just look at bands that impressed me most and met the criteria above for multiple-year periods, I can develop an evolving list of favorite bands that looks something like this, with rough dates of favored status indicated:

  • Simon and Garfunkel (Initial musical sentience-1971)
  • Steppenwolf (1971-1973)
  • Wings (1973-1976)
  • Steely Dan (1976-1978)
  • Jethro Tull (1978-1982)
  • XTC (1982-1984)
  • Butthole Surfers (1984-1994)
  • Hawkwind (1994-1998)
  • The Residents (1998-2004)
  • The Fall (2004-2009)
  • Napalm Death (2009-present)

So there’s eleven bands there, each one of which has captured and held my fancy for a long time, in relative terms. Can I pick a favorite among them? Yeah, I probably can, through process of elimination. Some of these can be tossed out since I rarely listen to them anymore (Simon and Garfunkel, Steppenwolf, XTC). And some others are so esoteric that they don’t really work for general listening, but require a more intense, active listening regimen for me, or work best in some specific setting, e.g. the gym, or the office (The Residents, The Fall, Napalm Death). One of these bands (Wings) is a guilty pleasure, and I know that I love them as an adult only because I discovered them as a child, before cynicism set in.

That leaves just four: Steely Dan, Hawkwind, Jethro Tull and Butthole Surfers. And if I honestly and fairly assess which of those three bands has given me the most listening pleasure over the longest period of time, then the answer becomes obvious and clear to me: that would be Jethro Tull, who are playing in the background as I write this post. Sure, they’ve become a nostalgia act live over the past 20 years, and haven’t put out a particularly solid studio album since 1982’s The Broadsword and the Beast (which didn’t move me quite as much on its release, but has aged brilliantly, and become one of my favorites), but their core material, from 1969’s Stand Up through the aforementioned Broadsword, always sounds good to me, and it’s a rare week that I don’t listen to, and enjoy, some part of their canon from that era.

Maybe it’s finally time to just start answering the big question with a more conventional answer. So . . . what’s my favorite band? Right now, that would be Napalm Death. And on a lifetime basis, that would be Jethro Tull.

Wow. That wasn’t hard at all.

At least until the first “Dude, Jethro Tull sucks!!!” e-mail rolls in . . .


1. Being a college basketball geek, I have written a few times here about the absurd media over-rating and fawning that the Big East Conference and its teams enjoyed. In keeping with said blind adulation, the idiots behind the NCAA Tournament selection process (chaired by an alpha idiot from the  Big Ten Conference, the most Evil and Greedy of the Evil Greedhead Conferences that comprise the BCS Cartel in Division I College Football) picked 11 Big East teams of the 68 total selected to dance. The results were predictable, as the Big East has folded like a taco when it really counts: in the round of 16, only two Big East teams remain, and both of them advanced because they played other Big East teams in the round of 32, so someone from the Big Evil was going to move on, no matter what. In my hoops bracket, I have no Big East teams in the Elite Eight. I think the odds are good that I will be correct in this regard. I doff my cap to Charles Barkley for being as publicly adamant about the absurd Cult of the Big East as I am. Well played, Round Mound of Rebound. Well played, indeed.

2. I strongly encourage you to follow  this link to the best blog post I’ve read in ages and ages. Great, thought-provoking points made within a super arc of stories, written with punch and grab and passion. A clear beginning, a riveting middle, a decisive end. Tight, tense, original. No pandering to the audience here. This is how it’s done, bloggers. Pay attention.

3. This week marks one year since we’ve heard from Mars Exploration Rover Spirit. In tribute to the rugged little ex-rover, who long outlasted her original 90 day mission guarantee before becoming stuck in the sand near Home Plate Plateau at the edge of Gusev Crater, I send you to the saddest space geek comic strip ever.

4. On a happier note, Spirit‘s sister rover, Opportunity, is still rolling, and her work is being lovingly honored and illustrated over at The Road to Endeavour. We live in a glorious age of space exploration, as witnessed by the latest monthly summary from the Planetary Society: What’s Up in the Solar System in March 2011. The biggest news this month is that we put a craft (MESSENGER) into orbit around the planet Mercury for the first time. We have now orbited every classical (e.g. visible to the naked eye) moving planetary body in the heavens: Earth, Moon, Mercury, Venus, Mars, Jupiter and Saturn. Why isn’t anybody (besides me and the geeks at Planetary Society) celebrating this astounding feat?

5. Blowing snow, slushy roads, bitter wind and freezing temperatures are not appropriate things to experience on the first day of spring, even up here in Albany. I demand a re-do. Somebody get cracking on that.


Full disclaimer up front: I know that there are few things lamer on the internet than blog posts about blog posting. So what follows here, in this post, by definition, completely sucks. I know that. I absolve you if you want to leave and go read something else, somewhere else. I probably would do so myself, if I was you. So to you folks with taste and common sense . . buh-bye! See you next time, when I have something actually entertaining and not self-indulgent to write about! Thanks for stopping by! Don’t let the door hit you in the ass on the way out! Ciao!

Okay, then. For those few of you who remain, and who clearly are masochistic Indie Albany addicts, who want to keep reading the most self-indulgent variety of blog posts possible, this is for you: I wrote a poem six years ago that contained the following two stanzas, among others:

Look and see the pundit
on the TV screen:
desperately he gibbers,
spouting bile and spleen.
He’s shouted right down
by all the other monkey-suit wearing clowns,
as the networks clap with glee.
We’re entertained by screaming,
don’t bother with the meaning,
why does he have to yell at me?

Look and see the blogger,
honesty his pledge,
making news in real time
on the cutting edge.
His facts are all wrong,
he doesn’t care, ’cause his convictions are strong,
though he makes no guarantees.
Quote him today for others,
confuse your friends and brothers,
why does he have to yell at me?

I don’t remember what annoyed me enough at the time to write those lines, but I find the sentiments they contain becoming ever more common for me again in 2011, when more often than not, my time online results in me getting up from computer, shaking my head and walking away annoyed. And what, I ask all three of you still reading, is the point of spending time doing that? My life is filled with so many good things involving so many people with whom I share a strong, real emotional bond. I am so, so incredibly blessed in that regard, all things considered. So what do I gain from spending intellectual or emotional energy being annoyed by people I barely know, or don’t know at all? A: Nothing, duh.

I’ve written before here (and elsewhere) about the pleasures associated with destroying things that I once worked hard to create. And I must report that over the past couple of months, my enjoyment of the act of creative destruction has grown exponentially. I’ve had a website since 1993, but I blew it up, and it’s gone, and that feels good. I’ve had a blog since 2000, but I vaporized it, and it no longer exists (except for the pieces being held hostage by a corporate entity that I regretfully got into bed with), and I am pleased. I used to have 550 Facebook friends, but now I have 145, the vast majority of the survivors being folks from my high school days with whom I have no other means to communicate, and this feels appropriate.

Those of you who I e-mail or see or talk to regularly, or those of you who have never communicated with me since you befriended me, or those of you who befriended me in the hopes that I might review your concert or album . . . well, sorry, and no disrespect intended, but I’ve deleted you, since you don’t need to read my routine piffle and tripe updates any more than I need to read yours. Let’s interact in the real world someday, alright? Cool.

The sense of liberation associated with these acts of creative destruction is profound. It’s similar to the sense of freedom I felt when I stopped hosting a television show, or when I finished my Masters Degree, or when I gave up my byline in a local newsweekly. Once upon a time, many, many years ago, I had no public persona at all. But then, for a variety of reasons, some sound, some not, I worked very hard and I built a fairly powerful personal brand in our local market. And that was cool, for a while. But now, in 2011, I find myself increasingly wishing to be free of the bonds that such a public persona imposes. I’m ready to return to a place of greater anonymity, where no one outside of my family, friendly and professional circles pays any attention to what I do or say.

I’m vanishing, in other words. Yeah, sure, I know that there are ways to find all sorts of my old stuff online, and my footprints in the internet tubes aren’t that easily swept away, but I intend to be far more judicious and fickle about where and how often and with whom I walk online in the future. Once upon a time, I was an internet pioneer, blazing trails for others to follow. Now, I’m the old guy on the virtual corner telling the kids to get the hell off my lawn. Enough’s enough. Game, set, match. Give me my golden watch, because I’m ready to sit on the porch and rock. But, seriously: get the hell off my lawn. Now.

Indie Albany, for now, is going to be my last and only stand in terms of internet presence, unless you were an old drinking buddy, or a former band-mate, or an ex-girlfriend, or a fellow military traveler from ages and ages ago, or a college or grad school chum, in which case I’ll see you in Facebook, more privately, without a peanut gallery of gawkers.

This site provides me with all the creative satisfaction I require at this point, as far as the general public is concerned. Beyond that, I’ve shared more than enough, for long enough. It’s selfish time now. I have some other “real world” creative endeavors that I’m working on, to which only my family is privy at this point. I also have loads and load of things happening on a professional and community volunteer front, and the folks involved there know what they need to know, when they need to know it.

It’s hard to imagine that, once upon a time, these kinds of social connections were viewed as being more than enough, isn’t it? I’m ready to wax nostalgic. I’m ready to go quaint. I’m vanishing, and it feels so good . . .

In closing, I apologize again to the couple of you who stuck with this post to end, as there are few things lamer than watching a writer using an internet outlet to complain about internet outlets. That’s overflowing with suck, and I know it. But I’m putting this post here tonight anyway, so that when people grumble about being deleted from my Facebook friends list, or about why my Worst Rock Band Ever page is gone, or about what happened to the Hidden in Suburbia photo-essays, I don’t have to expend any intellectual energy on replying, but can just cut and paste this link instead.

Because I’m vanishing. Poof. Pow. Gone . . .