Traditional pensions have been under attack for decades. Employers don't want the open-ended liability and have been closing their plans to new hires and, in some cases, freezing benefits.

But if you were lucky enough to be grandfathered into an existing pension plan, you could generally rest assured that your benefits, however modest they might be, were safe, particularly if you were already in retirement.

Not anymore.

The recently-passed spending bill had a provision tucked into the back that fired a major warning shot across the bow of both current and future retirees: Some underfunded pension plans will be allowed to reduce benefits — even to those already in retirement.

This is a big deal. While it may not necessarily be “fair,” most of us came to accept a long time ago that Millennial, Gen X, and even most Baby Boomer workers would not have the kind of retirement security that the pre-World-War-II generations did.

Companies have been transitioning their employees from defined-benefit pensions, in which the employer accepts the investment risk, to defined-contribution 401k plans, in which the employee accepts the investment risk, for decades. But it's always been understood that the benefits of workers in or near retirement were sacrosanct except in the case of company failure.

This amounts to a broken promise, and it brings us one step closer to the death of pensions.

The End of Pensions Is Nigh

Pensions have already been slowly dying a death by a thousand cuts. Private-sector pensions have declined from nearly 35% of the workforce in the early ‘90s to 18% today. But what prompted this new assault?

Underfunding. The Pension Benefit Guaranty Corp, the government insurance company that backstops pension benefits, reported that multi-employer plans covering more than a million workers were in danger of failing with deficits of $42 billion. Reducing benefits brings the plans closer to solvency and reduces the risk to the Federal government of having to assume responsibility.