It's no secret that our middle class is under attack. No serious presidential candidate is denying that working America faces stagnant wages, rising health care costs and retirement insecurity, all of which put the American Dream at risk.
But a new study by the Employee Benefit Research Institute and Mercer Human Resources Consulting revealed yesterday in the LA Times shows a secure retirement is more endangered than previously thought:
Nearly two-thirds of employers that offer traditional pensions have closed their plans to new hires or frozen them for all employees, or plan to do so in the next two years, according to [the study].
We're not just talking about one sector, as in manufacturing, where jobs are being outsourced in the large numbers.
...the trend is no longer confined to troubled industries such as steel, auto and airlines, but now involves healthy companies such as IBM and Verizon.
Experts say closing pensions and using that money to increase contributions to 401(k) plans, where employees are responsible for managing their own retirement money, is not making up the difference.
The offsetting benefits of 401(k)s "are not measuring up," said David M. Certner, legislative policy director for AARP, the giant services and lobbying organization for senior citizens. "There are a lot more ways people can get tripped up with 401(k)s than with traditional pensions."
The study of 162 employers, including some of the nation's largest companies, also found:
- 25% of employers questioned had closed their pensions to new hires within the last two years
- 12.9% had frozen their plans for all employees.
- More than 30% of employers expected to make similar changes in the coming two years.
