The House of Representatives last week approved a plan that would shore up multiemployer pensions serving 1.3 million blue-collar Americans, and permitting investing borrowed taxpayer money in the stock market. According to the Heritage Foundation, 96% of those enrolled in multiemployer plans are in pensions that are less than 60% funded, implying a tidal wave of insolvencies could be looming.This podcast (7:56) argues that advisors would do well to do the opposite of the current irresponsible spirit of the times. In contrast to legislation that would license investing in stocks to bail out an underfunded pension, advisors should build sound pensions that would undergird clients’ riskier ventures in stocks, secure in the knowledge that their basic needs are being met.
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