The NFL referee strike is over, yet the finger-pointing continues. But before you spend a second of your Sunday afternoon lashing out at NFL Commissioner Roger Goodell, consider an unlikely and unmentioned culprit in the ref debacle: Fed Chairman Ben Bernanke.
Sure, Bernanke quarterbacks on a very different green field where he calls all the plays, but his near-zero interest-rate strategy is at the heart of the pension fight that kept the strike lingering for months.
It’s also at the heart of a looming problem for workers and employers alike.
Like many employers, the NFL owners wanted to transition their refs from a defined-benefit plan, where employers are on the hook for fixed payments after an employee retires, to a 401(k) plan, where employers match employee contributions.
If you work in the private sector, you’ve probably already gone through this process, as more than 70 percent of companies have moved solely to 401(k)s. Unlike the refs, non-unionized workers don’t have much leverage when companies decide to throw their pension plans out the window.
In the NFL’s case, pushing their refs into 401(k)s would have reduced the cost to the NFL owners by 60 percent, but that’s just part of the story.
Another reason employers — even those as flush with cash as the NFL — are trying to run away from pensions in droves is that with Bernanke’s Fed keeping rates at basically zero, any company that continues to offer pensions to its employees is doubling down on a ballooning liability. That’s because with no sure way to lock in 6, 7 or 8 percent returns, the math doesn’t work. Not even close.
Savers — whether they be thrifty Americans who put their savings away in a money-market fund, or corporations who socked away billions to meet the needs of their retirees — have been penalized by Bernanke’s call on interest rates.
The NFL owners know this, which is why they dug in their heels.
The NFL refs have the luxury of instant replay to correct their bad calls. Ben Bernanke does not.