New York Times Nonsense: Donald Trump and Defined Contribution Plans

How Donald Trump and defined contribution plans get a raw deal from the press.

How Donald Trump and defined contribution plans get a raw deal from the press.

Sage speaker of truth to power, or Looney Toons billionaire with bad hair. However you feel about Donald Trump, one thing is clear; any pretense of press objectivity is officially over.

Some argue he’s so dangerous an adversarial stance is not only justified, but morally required. Whether or not it’s true doesn’t detract from the central premise, and appears to confirm Trump’s comments that the media is rigged against him.

Indeed, New York Times columnist Jim Rutenberg spoke for much of the mainstream press when he advocated taking sides last August, describing Trump as “a demagogue playing to the nation’s worst racist and nationalistic tendencies,” and that “he cozies up to anti-American dictators.”

That the “Gray Lady” would go this way is sad but not surprising, and reflects the paper’s deepening direction for some time.

If only it were confined to politics. A piece about 403(b)s illustrates bias best left for the opinion pages. The following sentence about teacher compensation is symptomatic of the article’s tone, which was pitched as a straight news piece:

“As a result, the people who do the most good in the world, spending their careers helping others in exchange for modest paychecks, often get the worst retirement plans.”

Far be it from us to slam teachers, as more than one family member has entered the noble profession, but any retirement talk must include pensions that, until recently, included 70 percent of salary and health care benefits for life. Union negotiating tactics often called for lower salaries in order to win better benefits.

Strapped state budgets mean such “Cadillac” retirement plans (described that way for a reason) are increasingly rare, but some salaries—in Massachusetts, for instance—average over $100,000 per teaching position. Low? We guess it’s a matter of perspective.

As for 403(b)s, Plan Sponsor Council of America reports higher contributions and better balances than similar DC plans. TIAA (yes, we’ll adjust for the source) finds that “not-for-profit sector” plan participants—read 403(b)—are estimated to replace more than 90 percent of their pre-retirement income in retirement.

Even Alicia Munnell of the Center for Retirement Research at Boston College, once a solid defined contribution skeptic, now says the hit taken by switching from defined benefit to defined contribution plans isn’t what she once thought, and finds parity in replacement rates between both.

Is there still work to be done? Sure, but to dismiss 403(b)s out of whole cloth reflects not only a brash bias, but a staggering ignorance of the true retirement challenges teachers face.

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