In this article, former employees from a small Rhode Island town are facing a cutback in pension payments from the city they used to work for. (At a time when bondholders are seeing no such cutback.) Click here to see the story.
Implications: As the story suggests, it is more likely that a court—rather than a city council or mayor—will decide the outcome of this case. I raise the issue not for its political ramifications… but to further illustrate the creative fallout that continues to make itself known in the wake of the recent recession.
In what ways might these kinds of headlines change the way consumers save for retirement? In what ways might these issues cause 45-64 year-old consumers to become even more cautious about spending (since they are close in proximity to retirement)? In what ways might these stories discourage younger folks from participating in a pension plan, 401K or other employer-sanctioned investment plan?
If you’re in the financial planning, investment or banking business… life just threw a whole collection of new questions your way!
Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.