It seems like a pathway to comfortable retirement is a luxury saved for those at the top in today’s economy—at least if you work at 3M. After freezing its pension program for non-unionized workers, the conglomerate company known for manufacturing Post-its, command strips, and tape is tacking more money into its CEO’s benefit package.
Earlier this week, 3M announced that it would freeze pensions for non-unionized employees and shift to a 401(k) retirement plan in 2028. When asked for comment, a representative for 3M pointed Fortune to its press release, which stated that they’ve been chipping away at the pension program since 2009 because a 401(k) plan allows for “more flexibility and control” when investing.
“This is an important decision for 3M as it helps to set up both companies for future success,” CEO Mike Roman said in the release. “This was also a difficult decision because it impacts employees across the United States.”
But Roman’s pension plan seems to be steadily invested in; MarketWatch references Securities and Exchange Commission statements that indicate Roman’s pension has increased by $19.3 million over the last couple of years. His current pension is worth $25.8 million, MarketWatch estimates.
Certain fixtures and benefits of jobs have faded away into the background for many workers over the past several decades. No longer do employees openly chain-smoke like Don Draper in the offices or have a bar cart to take shots from. Similarly outdated is a good old-fashioned pension. Known for providing greater long-term stability than 401(k) programs, pensions in the private sector dwindled from their height of 175,000 defined-benefit plans in the 1980s to only 46,000 in 2020, per U.S. Department of Labor data. Companies invested less in their employees and put the onus of saving on the worker.
Even unionized workers are finding the pension elusive. Despite achieving a historic victory this past year, United Auto Workers were unable to succeed in pushing for the return of a pension program for its members.
A good pension goes a long way these days, especially as a comfortable retirement costs more than $1 million in an age of high inflation. Living longer than generations before them, but without the safety net provided by a company-backed pension, some boomers are returning to work to make ends meet. Many seniors live in a state of financial precarity, as 45% of older men living alone and 54% of elderly women living alone are considered poor by federal poverty standards or have salaries too small to account for essentials, according to the Elder Index.
“This will be the first time that we have a lot of people who find themselves downwardly mobile as they grow older,” Diane Oakley, executive director of the National Institute on Retirement Security, told the Atlantic in 2018. “They’re going to go from being near-poor to poor.”
Although it appears that some CEOs will skate away just fine.