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Americans Demand a Return for Traditional Pensions Amid Retirement Struggles

About 77% of Americans feel that the unavailability of pensions is making it harder to retire comfortably.
Cover Image Source: Traditional Pensions | Unsplash | Photo by Tatiana P
Cover Image Source: Traditional Pensions | Unsplash | Photo by Tatiana P

Millions of Americans face challenges in saving adequate funds for retirement, leading to growing advocacy for the resurgence of pensions. In the private sector, pensions have largely faded in favor of defined contribution plans like 401(k)s. Nonetheless, there's a mounting movement advocating for a return to defined benefit plans, or pensions, driven by concerns about a looming retirement crisis.


In a recent survey by the National Institute on Retirement Security, about three-quarters of respondents (77%) expressed that the unavailability of pensions has made it harder to achieve the American Dream. Concurrently, 83% of respondents emphasized the necessity of pensions for all workers to achieve independence and self-reliance during retirement. 


During the 1980s and '90s, employers began introducing 401(k) plans and other defined contribution options, relegating pensions primarily to public sector employees. According to, the increasing cost of pensions was one of the main reasons behind the shift.

"Under a pension system, employers had to bear the responsibility to choose the right investments for the saved funds of employees to ensure future guaranteed monthly payments for life," Craig Eissler, a wealth advisor for Halbert Hargrove, told Money.


As life expectancy in the U.S. surged during the 1980s and 1990s, coupled with declining interest rates and diminishing investment returns, employers found themselves facing escalating costs, leading to increased contributions. Consequently, many private companies now view pension benefits as both risky and costly, thus favoring 401(k) plans.

Traditional pensions place the responsibility of saving and investing for retirement solely on the employer, with the monthly pension amount determined by a complex formula based on salary and years of service.

Conversely, in a DC plan such as a 401(k), the onus of saving and investing falls on the employee, while the employer decides whether and how much to contribute to the worker's account. Furthermore, retirees with DC plans must navigate investment decisions and annually determine withdrawal amounts to avoid depleting their funds.

Given the significant expense pensions pose for employers, their widespread revival appears unlikely in the near future. Dan Doonan, executive director of NIRS, suggests that a broad reinstatement of pension plans is not feasible.

For pensions to resurface, policymakers must devise measures to incentivize employers to sponsor comprehensive retirement plans for their employees. Moreover, substantial reforms and innovative plan structures will be necessary to pave the way for a potential resurgence of pensions.


US Senator Bernie Sanders has urged Congress to pass legislation that will help cut the rate of poverty among senior citizens and ensure that American workers once again "retire with dignity."


Sanders convened a hearing of the Senate Health, Education, Labor, and Pensions (HELP) Committee to address the nation's retirement challenges. In an op-ed for Fox News, he urged Congress to enact the Social Security Expansion Act, aimed at ensuring the program's solvency for the next 75 years.

Additionally, the proposed legislation aims to boost benefits for seniors and individuals with disabilities by $2,400 annually.