Sam Ghandchiسام قندچي Are Retirement Accounts in Danger?

Sam Ghandchi

Are Retirement Accounts in Danger?

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The Great Depression and stock market crash of the 1930s in the United States was a sobering experience, not only for stock owners but also for the government. In response to the shock waves of the market collapse, United States government formed a watchdog regulatory body called the Security and Exchange Commission (SEC).

SEC will soon be 80 years old and no one doubts its important role in the last century of its existence. All IPO filings go thru the scrutiny of SEC to make sure the prices offered match real value in the company that is going public.

Events such as the stock market collapse of the 1930s have since happened in countries like Kuwait where they did not have such regulatory watchdogs and many firms listed in their stock exchange turned out not to be worth their reported value. But in the U.S., thanks to SEC, such disasters have become a rare occurrence.

Considering the current state of the world economy, especially the crisis of Europe, one wonders if an institution similar to SEC is needed to monitor the commitments that governments are making to people for their retirement benefits. Individuals have contributed to such funds all their lives with the hope of using these accounts as source of income when not being able to work in their old age.

For example, the austerity measures in many European countries are wiping out retirement accounts. The strikes are very understandable in those countries where people are losing the benefits they had paid for throughout their lives. The bankruptcy of states such as the Greek government is as devastating for the people of that country as the stock market collapse of 1930s was for the American people.

Even in the United States, some cities like Stockton, California have recently gone bankrupt and many benefits owed by the city government of Stockton to its residents are now in a precarious status.

Protection of citizens’ entitlement benefits, whether the accounts are private or government owned, is even more serious than the stock investment accounts that SEC monitors. In fact, the contributions people make to retirement accounts is for their essential living during old age, whereas stock investment is mostly expendable income.

First, we must ask whether it is necessary to form a new regulatory body or whether currently existing government agencies can adequately address the issues involved. Next, we need to ask how such a regulatory body could audit checks and balances of the contributions that have already been made by the citizens, regardless of whether the entitlements are from the government or through private firms. Lastly, for such a watchdog, either NGO or state agency, to be able to monitor obligations owed to citizens by nation states, it would need to be backed by a global authority like a Worldwide Federal Reserve, which currently does not exist?

The above may seem like formidable issues to overcome but leaving things in chaos may be a recipe for disaster in the future, perhaps much worse than the situation in Greece and Spain that we are witnessing today.


Hoping for a democratic and secular futurist republic in Iran,


Sam Ghandchi
Oct 25, 2012
















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