I suspect something got lost in the translation here. It refers to 205,000 per year, which is the current maximum benefit in a defined benefit pension plan. Under current law, this amount gets indexed for inflation each year. They might be talking about freezing the limit. There would be a lot of unintended consequences, just like the last time they played with the limit, and the time before that, and the time before that.
My employer still matches my contributions to my 401K. I wonder how long until those who don’t save in my workplace complain of the economic injustice I unfairly get because they don’t save anything?
Anything that alters behavior will bear unintended consequences. They can only guess at the end result. Some things are obvious and perhaps are what they’re looking for.
You don’t get a tax break so you don’t put the money into a retirement plan the money will go into a bank and boost tier 1 capital. You spend it so velocity picks up. Those are two obvious beneficial results. Less money into money managers hands means less growth overall in equities and less capital available to buy debt. Of course the banks will likely be sitting on more cash so they will be the big beneficiaries.
Very interesting. If i sat and thought about this longer i bet i come up with at least 50 more results.