Pensions, Not 401(k)s, Lead to Secure Retirement

We public service workers have heard a lot of baseless attacks on our retirement plans lately. It’s time we went on the offense. What does this mean? Simple. Instead of just explaining why the retirement plans of medical assistants and social workers have not caused the current economic downturn, we should be encouraging our friends to examine their own retirement plans and fight for better ones.
Start with some definitions. What’s a pension? According to Elizabeth Warren, a Harvard Law School professor who heads the newly-created Consumer Financial Protection Bureau, “It’s an employer who says, in effect, ‘I’ll pay you $1,000, but $800 of it you’ll get in a paycheck today, and the other $200, I’m going to hang onto it on your behalf and put it aside, and these are the promises I’ll make for when you retire.'” Some people have likened this to a loan employees make to their companies in exchange for the promise of secure retirement down the line. Pensions used to provide basic assurances for all middle-class workers so that they could retire with economic security. Now most people rely on something called a 401(k), named for a clause in the tax code that allows people to put aside pre-tax dollars for retirement. How many dollars? Not enough. Not even close. 43 percent of American workers have less than $10,000 set aside in savings, according to the Employee Benefit Research Institute. Which makes sense, since 401(k) plans weren’t created for American workers. They were created to help CEOs “maximize the value of their retirements,” as Warren puts it. Which is a fancy way of saying they were created so the ultra-rich could stash extra money away on top of their pensions. So the next time someone asks you about your pension, do some explaining. And maybe instead of criticizing your secure retirement plans, your friend will march into his or her supervisor’s office and demand one for him or herself.  Or better yet – form a union.  
READ 43% have less than $10k for retirement 
READ Interview with Elizabeth Warren
UPDATE
: Last week truthout published a terrific piece by Ellen Dannin on secure retirement. Among other arguments Dannin makes, she does a terrific job explaining how many public employers failed to fund pensions for years and are now attacking the very employees they stiffed. READ and COMMENT
: Of Pensions, and Piggybanks: The Challenges of Ensuring a Secure Retirement