Pensions are making headlines again, but not because they're making a comeback—at least not yet. Turns out, most Americans are pretty nostalgic for those steady retirement payouts that used to be standard.
A 2024 survey by the National Institute on Retirement Security (NIRS) revealed that 83% of Americans think pensions shouldn't just be a public employee perk. Everyone should have access to them. And that's not just a talking point for one political party; support crosses party lines, with nearly equal backing from Democrats, Republicans, and Independents. Retirement security is apparently a bipartisan dream.
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But why are so many longing for the return of pensions? Well, retirement planning today feels like running a marathon on a treadmill that's speeding up every year. Wages? Stagnant. Costs of living? Rising.
The shift from pensions to 401(k)s put the responsibility for retirement squarely on workers, and not everyone is thrilled about it. The NIRS survey also found that 79% of Americans believe the country is in the middle of a retirement crisis, with more than half worried about whether they'll ever achieve financial security in their golden years.
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Pensions aren't just a financial safety net; they're a key ingredient to the American Dream, or so most Americans believe. Around 83% think pensions are essential to fostering independence and self-reliance in retirement. For many, it's a question of fairness, with some pointing out that government employees have access to guaranteed retirement income while others are left managing volatile 401(k) accounts and worrying about market downturns as they approach retirement.
Take Sara Schambers, for example. According to a March 2024 CNBC article, She's a fourth-generation Ford Motor F auto worker who watched her grandparents retire comfortably thanks to pensions. Today, despite her permanent position, those same benefits are a relic of the past. She's not alone. Millions of workers are staring down a future that's less "cozy retirement" and more "can I afford groceries this month?"
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It's not hard to see why pensions are appealing. They promise predictability, something 401(k)s can't guarantee. With pensions, the employer shoulders the investment risk, not the worker. That's a big deal when retirement savings depend on navigating a market that doesn't care whether you're trying to make ends meet or save for a vacation. And let's not forget, pensions also help employers. They're a proven way to attract and keep talent in critical industries, like teaching and public safety.
Still, the hurdles to bringing pensions back are no small feat. Employers aren't exactly chomping at the bit to revive defined benefit plans. Sure, IBM IBM made headlines in 2023 by moving back to a defined benefit contribution system, but it's an outlier. Most companies have stuck to 401(k)s, arguing they're more portable for today's workforce, where job-hopping is the norm. Plus, funding pensions requires serious cash, and that's a commitment many employers don't want to make.
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Some critics argue that 401(k)s aren't as bad as they seem. Americans now hold over $40 trillion in retirement assets—an inflation-adjusted increase of 330% over 35 years. But those numbers don't mean much to the nearly half of U.S. households that have no retirement savings at all. And then there's the looming Social Security problem. With its trust funds inching toward insolvency, even the meager safety net Social Security provides might not be as reliable as it once was.
Schambers, however, isn't giving up. She and her union plan to push for pensions during their next round of contract negotiations in 2028. "We're ready to fight like hell for real retirement security," she said, capturing the frustration of workers who feel like their retirement dreams are slipping away.
So, will pensions ever make a widespread comeback? Maybe. Maybe not. But it's apparent Americans are done pretending that 401(k)s alone can solve the retirement puzzle. For now, pensions remain more of a wish list item than a reality, but the conversation isn't going away anytime soon.
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