Who Owns Wall Street?

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Declining funding and sponsorship of pension plans is shifting the burden of retirement savings to participants in defined contribution plans.

The U.S. stock market is closing out the third quarter with what is shaping up to be the best September since 2013. When people think of who owns the stock market they usually think of rich Wall Street CEO’s, but according to taxpolicycenter.org, the biggest owner of stocks is retirement plans. As of 2015 retirement plans held 37% of all stocks. That includes 401K plans and pensions (defined benefit plans). Individual taxable accounts make up only 24% of the total stocks held. Other big players include foreign investors, insurance companies, and non-profits. So the stock market’s record highs are good news for retirement savers and the future economic landscape because we know that social security will be under pressure to service the burgeoning aging population. In addition, many guaranteed benefit plans are woefully underfunded and need a boost to meet their obligations to pensioners relying on them. The proposed tax reform will help corporate profits. Those profits pass through to the owners/shareholders – primarily retirement accounts. Please see page 88 of the Global Perspectives™ Book for a look at retirement funding.

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