For decades, executives relied on the same pension plan as other company employees, so they had an incentive to make it generous. The shift toward a dual system started in 1994, when Congress passed a law intended to limit the cost to taxpayers of runaway executive pay. The law barred companies from taking a tax deduction on compensation in excess of $1 million a year for any current employee. The result: Companies began setting up supplemental pension plans that encouraged senior managers to defer compensation.
In short, to combat excessive executive compensation Congress passed a law limiting tax deductions for companies paying more than $1 million. So, executives set up supplemental pension plans and quit funding adequately the employees' pension plans. Sure the executives are slimy in this regard but they're acting in their own best interests. Of course, Drum's proposal would be to make another law appending the original law to correct the original unintended consequences instead of repealing the original law.
So the government passed a law to try to obtain a pretty trivial amount of revenue and in the process screwed up millions people's pensions putting them at more retirement risk instead of less and then the government never really increased their revenue. Good Work, Thanks!
I won't get into several other sticking points about Drum and underfunded pension plans (such as Social Security) and his love of pension plans in general.
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