Retirement Security Is at Risk. Americans Want Pensions

By: Hank Kim, CEO, NCPERS

October is National Retirement Security Month, and Americans are sending a clear message about the future they want: 70% believe a pension is better than a 401(k).

Yet at a time when support for pensions remains strong, retirement security is becoming harder to achieve. Rising costs, market volatility, longer life expectancies, more self-employed gig workers, and gaps in workplace retirement coverage have left millions of workers questioning whether they will ever be able to retire at all, let alone with dignity.

Recent research from NIRS shows that 80% of Americans believe the nation is facing a retirement crisis, and 85% believe policymakers should make retirement security a higher national priority.

The Retirement Security Challenge Is Growing

Over the past few decades, the U.S. has shifted retirement risk away from employers and onto individual workers. Traditional pensions steadily disappeared across much of the private sector, replaced by defined contribution plans that do not mandate savings, require workers to navigate complex financial decisions, absorb market risk, and determine how long their savings will last.

The consequences are becoming increasingly clear. Too many Americans are approaching retirement with inadequate savings and uncertainty about whether they can afford to stop working. Meanwhile, more than 76 million U.S. workers lack access to a workplace retirement plan altogether.

Retirement security is no longer a challenge affecting only a small segment of the population. It has become one of the defining economic issues facing the country.

Even the Private Sector Is Moving Toward Pension-Like Solutions

As retirement insecurity grows, an interesting shift is taking place.

Some of the nation’s largest financial firms are moving toward solutions that look increasingly like pensions. Fidelity, Vanguard, BlackRock, and others are adding annuity options to 401(k) plans in an effort to provide participants with more predictable lifetime income. BlackRock recently announced plans to help employers build retirement offerings that incorporate features traditionally associated with pension investing and retirement-income design.

The trend reflects what workers have been saying for years: they want greater certainty in retirement and income they cannot outlive. They want professional investment management. They want protection from market swings as they enter retirement. Most importantly, they want confidence that years of hard work will lead to financial security in their golden years.

In other words, they want many of the same features public pension plans have delivered for 170 years.

Why Pensions Remain One of the Most Effective Retirement Tools

Defined benefit plans provide retirement income efficiently and cost-effectively by pooling resources, sharing risk, and investing over long-term horizons. Research consistently shows that pensions can deliver the same or better retirement income at nearly half the cost than individual retirement accounts. Administrative and investment expenses for 401(k)-style accounts can be more than four times higher than those of pension plans.

This matters not only for retirees but for society as a whole. Retirement security strengthens families, communities, and local economies. It reduces reliance on public assistance programs and helps ensure older Americans can maintain their quality of life.

And at a time when more than 11,000 Americans are turning 65 years old every day, ensuring seniors have the financial security to continue contributing to the economy has never been more important. When retirement systems work well, everyone benefits. That is why the work of the public pension community is so important.

That is why the work of the public pension community is so important.

Every day, NCPERS members help safeguard the retirement security of more than 20 million teachers, police officers, firefighters, municipal workers, and other public servants. At a time when millions of Americans are searching for greater retirement certainty, public pensions continue to demonstrate the value of professionally managed, lifetime retirement benefits. Our members’ work serves as a reminder that retirement security is not simply a financial concept. It is a promise made and kept.

Advancing Retirement Security Together

As we observe National Retirement Security Month, we should recognize that retirement security does not happen by accident. It requires thoughtful policy, sound governance, long-term planning, and a commitment to solutions that put people first.

This month, I encourage you to join NCPERS in advancing retirement security and raising awareness about the challenges facing today’s workers:

• Advocate for the future: Save the date for NCPERS Legislative Forum & Policy Day, July 19-21, 2027, in Washington, D.C. This event gives pension leaders an opportunity to engage directly with policymakers and help advance solutions that strengthen retirement security.
• Share your story: What does retirement security mean to you, your organization, or your plan participants? Your perspective helps illustrate the real-world impact of pensions and reminds us why this work matters. To learn more, contact communications@ncpers.org.
• Amplify the message: Follow and use the hashtags #nationalretirementsecuritymonth and #publicpensions on social media platforms to join the conversation and amplify the message of retirement security. Be sure to tag NCPERS (@NCPERS) so we can help spread the word.
• Stay in the know: Sign up for NCPERS Retirement Security SmartBrief to receive weekly updates on issues that impact our financial wellbeing in retirement. Subscribe for free and share with your plan’s members as a resource.

Despite decades of change in the retirement landscape, Americans continue to tell us what they want. They want retirement income they can count on. They want peace of mind. They want retirement security.

The challenge before policymakers, employers, and retirement leaders is how to deliver it. Increasingly, Americans believe pensions are part of the answer.