Recent research finds 401(k)-style defined contribution plans have lost their shine. IRAs and 401(k) plans lost a combined $2.8 trillion, or 47% of their value, between September 2007 and December 2008, the height of the economic recession. [As if money run by the successors of Jimmy Hoffa would do any better under crazed Fed money pumping schemes-RW]
The biggest problem with defined contribution plans is that alone they do not provide retirees with guaranteed retirement income...[Yeah, guaranteed income like SS, which is headed toward older retirement ages and lower payouts-RW]
We must work to improve and expand retirement options.
We need to explore new innovative retirement models that provide guaranteed retirement income for all workers if we are going to be a country where once again working people can reasonably expect to be able to retire.
This year, California State Sen. Kevin De León and Darrell Steinberg, the Senate president pro tempore, made headlines for introducing legislation that would allow private-sector workers to enroll in a modest, state-operated retirement program.
A similar proposal has been championed by New York City Comptroller John Liu. The plan, based on a new retirement model created by New School economics professor Teresa Ghilarducci, would pool employee and employer contributions into a professionally managed, citywide retirement fund.
Although the future of these proposals is uncertain, they are a step in the right direction.