Traditional Pension System More Cost-Efficient for New York City than 401(k)s
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The city of New York helps out taxpayers and retired public employees by sticking with a traditional defined-benefit pension plan rather than a 401(k) model, according to a new report issued by the National Institute on Retirement Security (NIRS). According to the NIRS release describing the report, ”A Better Bang for New York City’s Buck,” which was commissioned by New York City Comptroller John C. Liu:
New York City’s defined-benefit pension plans can deliver the same retirement income at a nearly 40 percent lower cost than a defined contribution 401(k)-type individual account.
The report builds on research gathered by NIRS for a national study, “Decisions, Decisions: Retirement Plan Choices for Public Employees and Employers,” issued in September. In a press statement, NIRS Executive Director Diane Oakley explained:
Survey: Public Supports Guaranteed Pensions
Nearly nine out of 10 Americans believe that everyone should have access to a defined-benefit pension plan. Most also support creative government policies that would help make this dream a reality. These are some of the findings of a recent national public opinion survey of more than 800 Americans undertaken for the National Institute on Retirement Security (NIRS). On a conference call announcing the survey results, NIRS Executive Director Beth Almeida said she hopes that the survey can serve as an opinion benchmark for policymakers as they attempt to improve the fading retirement prospects of millions of people.
According to the survey, 85 percent of the public view retirement security as a shared responsibility between individuals, employers and the government. People believe the three-legged retirement stool of the past, consisting of Social Security, pension plans and private savings, is still the best approach to meeting retirement needs in the 21st century.
