By: Russ Kamp, Managing Director, Ryan ALM, Inc.

This post is the 1,500th on this blog! I hope that you’ve found our insights useful. We’ve certainly appreciated the feedback – comments, questions, and likes – throughout the years. A lot of good debate has flowed from the ideas that we have expressed and we hope that it continues. The purpose of this blog is to provide education to those engaged in the pension/retirement industry. We have an incredible responsibility to millions of American workers who are counting on us to help provide a dignified retirement. A goal that is becoming more challenging every day.

As stated numerous times, doing the same-old-same-old is not working. How do we know? Just look at the surveys that regularly appear in our industry’s media outlets. Here is one from MissionSquare Research Institute done in collaboration with Greenwald Research. The survey reached a nationally representative sample of 1,009 state and local government workers between September 12 and October 4. What they found is upsetting, if not surprising. According to the research, “81% are concerned they won’t have enough money to last throughout retirement, and 78% doubt they’ll have enough to live comfortably during their golden years.”

Some of the other findings in the survey also tell a sad story. In fact, 73% of respondents are concerned they won’t be able to retire on time, while the same number are unsure whether they’ll have sufficient emergency savings. How terrible. The part about being able to retire “on time” is not often in the workers control wether because of health and the ability to continue to do the required task or as a result of other plans by their employer. Amazingly, public sector workers believe that their current retirement situation is better than those in the private sector. Wow, if that isn’t telling of the crisis unfolding in this country.

Given these results, it shouldn’t be shocking that unions are seeking a return of DB plans as the primary retirement vehicle. We know that asking untrained individuals to fund, manage, and then disburse a “benefit” through a defined contribution plan is poor policy. We’ve seen the results and they are horrid, with median balances for all age groups being significantly below the level needed to have any kind of retirement. Currently, the International Association of Machinists and Aerospace Workers are on strike at Boeing, and a major sticking point is the union’s desire to see a reopening of Boeing’s frozen DB plan.

We’ve also recently seen the UAW and ILA memberships seek access to DB plans. It shouldn’t be a shock given the ineffectiveness of DC plans that were once considered supplemental to pensions. Again, asking the American worker to fund a DC offering with little to no disposable income, investment acumen, or a crystal ball to help with longevity concerns is just foolish. Yes, there is more to do, much more! It is time to realize that DB plans are the only true retirement vehicle and one that helps retain and attract talented workers who aren’t easily replaced. Wake up before the crisis deepens and everyone suffers.