Sign up for our daily briefing

Make your busy days simpler with the Axios AM and PM newsletters. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to the Axios Closer newsletter for insights into the day’s business news and trends and why they matter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with the Axios Sports newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with the Axios Des Moines newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with the Axios Tampa Bay newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Data: LIMRA Secure Retirement Institute; Chart: Harry Stevens/Axios

The younger you are, the less retirement security you’re likely to have, as employers accelerate efforts to shed costly pensions and replace them with alternatives that make workers shoulder more of the risk and responsibility.

Why it matters: Millennials and members of Generation Z will face less prosperous golden years than their parents, given the retirement accounts they get nowunless they are diligent about allocating money, investing it wisely, and not blowing it when they gain full access.

The backstory: Companies have long been moving away from traditional pensions, where retirees are guaranteed a certain level of benefits, and replacing them with 401(k)s and other retirement savings accounts, which are more vulnerable to the ups and downs of the stock market. But lately, those changes are happening even faster.

What’s happening: A perfect storm of circumstances, from lower interest rates to higher longevity rates, is prompting corporations to offload their pension plans — by selling them to insurance companies and offering lump-sum payments to some workers.

  • Deal volume in the “pension risk transfer” business, in which a big company like Lockheed Martin or FedEx sells all or part of its pension obligations to an insurer like Prudential or Metropolitan Life, was the biggest ever in 2018, and is on track to be bigger still this year.
  • The insurance company pays retired workers an annuity that is equal in value to the pension they’ve earned, but the workers lose certain safeguards, like the backstop of the Pension Benefit Guaranty Corporation, the agency that steps in if a company can’t pay.
  • “Companies are looking to get those defined benefit plans off their books,” Robert Falzon, vice chairman of Prudential, tells Axios. “It’s a multi-trillion dollar market that will continue for some period of time.”

If your pension is sold to an insurance company, there are “potentially terrible consequences,” Norman Stein, a law professor at Drexel University and policy advisor to the Pension Rights Center, tells Axios.

  • “What happens if the insurance company gets into trouble?” he said. “What happens if you find out that your benefit was miscalculated and you’re entitled to more than the company sold your pension for?”

By the numbers: Among Fortune 500 companies, only 81 sponsored a pension plan in 2017, down from 288 in 1998, according to Prudential.

  • At the same time, the number of pension risk transfer deals rose to 493 in 2018 from 203 in 2012, according to the LIMRA Secure Retirement Institute, a nonpartisan research center.
  • In the public sector, many pension plans are dangerously underfunded.

Between the lines: 401(k)s and other defined contribution plans are cheaper for the firms than pensions and more onerous for the employees. Consumer advocates say that the swapping pensions for 401(k)s is a raw deal for workers — particularly in an uncertain economy.

  • When the next recession hits, a falling stock market will drive down the value of 401(k) and IRA accounts invested in equities.
  • While pension plans are run by professionals whose fees are paid by the corporate sponsor, consumers with IRAs or 401(k)s must figure out their own investment strategies and pay fees.
  • Despite the tax penalties, many consumers raid their 401(k)s to pay pre-retirement expenses, something they can’t do with a pension.

Unless you buy an annuity — which comes with its own plusses and minuses — it’s hard to know what to do when you reach retirement age and have to parcel out your savings to last a lifetime.

  • “A lot of people don’t know what to do with a lump sum,” Chantel Sheaks, executive director of retirement policy at the U.S. Chamber of Commerce, tells Axios.

Silver lining: For younger people, who are less likely to stay at the same job for decades, a 401(k) or IRA can offer more flexibility.

The bottom line: Despite these issues, people with either a defined benefit or a defined contribution plan from their employer should consider themselves lucky.

  • A quarter of non-retired Americans had no retirement savings or pension in 2018, according to the Federal Reserve, while “six in 10 non-retirees who hold self-directed retirement savings accounts, such as a 401(k) or IRA, have little or no comfort in managing their investments.”

Go deeper

Starbucks drops worker vaccine mandate after SCOTUS ruling

Photo: Jakub Porzycki/NurPhoto via Getty Images

Starbucks announced in a memo to employees Tuesday that it has dropped plans to implement a vaccine mandate for all U.S. workers, AP reported on Wednesday.

Why it matters: The company's decision comes in response to the Supreme Court's ruling last week to block the Biden administration's COVID-19 vaccine-or-test requirement for large employers.

1 hour ago - Health

Omicron hits American hospitals disproportionately hard

Expand chart
Data: Our World in Data; Chart: Will Chase/Axios

America is seeing more COVID hospitalizations than other wealthy countries during the Omicron surge, according to Our World in Data.

Why it matters: Vaccines keep the vast majority of COVID cases out of the hospital, but vaccination rates are also lower in the U.S. than these other countries.

Updated 2 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: The end of the Omicron wave is in sight — Transplants rebound from COVID lull.
  2. Vaccines: WHO: No evidence that healthy children, teens need boosters — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden to announce plan to distribute 400 million masks for free — Government website for free COVID tests launches early.
  4. World: WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older.
  5. Variant tracker