Training repayment agreement provisions (TRAPs),are a new form of “stay-or-pay” contract that indebts employees to their bosses. Often inserted into contracts without workers’ knowledge, these restrictive labor covenants turn employer-sponsored job training and education programs into conditional loans that must be paid back — sometimes at a premium — if employees leave before a set date.
Employers argue that these clauses are a way to recoup their investment in employees who decide to leave the company prematurely. But these contracts have come under fire from labor groups and regulators. Oftentimes, the amount of debt demanded under TRAP contracts — which can be upward of $50,000 — is far higher than the employer’s training costs.
SLAVERY, WITH EXTRA STEPS.
With how most companies treat pensions these days, I prefer a 401k. I’d love for them to be the pensions of 100 years ago with stable long-lived companies that could be depended upon, but we don’t have that anymore. A single PE firm buying out your employer could raid the pension fund, or sell off the valuable parts of the company, leaving the smoldering husk of a company unable to fulfill is pension obligations. You may only get a small fraction of your expected pension payout in these cases when the company or the pension becomes nonviable. Thats what pension can look like today.
For all its faults, a 401k is yours, and goes with you. If (and I know this is a big “if”) a 401k account holder doesn’t make some really poor choices, a 401k and its owner’s contributions over the years can provide some of the best retirement savings for workers in the USA today.