Pension Change Puts the Burden on the Worker
By EDWARD WYATT
American workers now put more money into pension and retirement savings plans sponsored by their employers than the companies themselves do.
That remarkable milestone, determined by pension researchers reviewing the most recent data, shows just how far companies have moved away from the system of decades past, in which employers alone financed the retirement savings of their workers, and toward 401(k) and similar retirement plans financed mostly by workers.
The milestone is all the more remarkable because 401(k)'s and similar retirement accounts were never intended to be the main way for an employee to save for retirement. They were originally expected merely to supplement company-financed pension plans.
The new-style plans lack the protections of the old pension plans, like a guaranteed benefit and federal insurance to protect retirees if the company goes bankrupt.
The huge losses on retirement savings of workers at Enron (news/quote) and other troubled companies have focused attention on the vulnerability of the new retirement accounts.
Yet most American workers are optimistic about their financial prospects in retirement, confident they will have enough money to live comfortably, according to a survey released in February by the Employee Benefit Research Institute.
These workers are optimistic even though Americans generally are notoriously weak savers, with many lacking financial education. While corporations and the financial industry have shifted the burden to employees, they have far to go in adequately educating the public about its responsibilities in paying and planning for retirement.
[Full text: http://www.nytimes.com/2002/04/05/business/05PENS.html?pagewanted=print&position=top]
Carl
_________________________________________________________________ Chat with friends online, try MSN Messenger: http://messenger.msn.com