Should We “Ditch” the 401(k)?

September 8, 2010 ( - Over the past decades, defined-benefit plans have been replaced, for the most part, by defined-contribution plans like 401(k) plans. 

But the majority of Americans with access to 401(k) plans are not saving as much as they are allowed, and in some cases still not saving at all.  

But 401(k)s are doing better than one might believe, based on the news coverage.  Only about 10% have less in these accounts now than they did before the crash, according to the Employee Benefit Research Institute (EBRI) – though those tend to be older worker/savers, closer to retirement, and thus with less time to make up for that impact. 

But is the real debate a 401(k) versus a government option, but more about a mandatory savings system, a “public option” (in addition to Social Security) rather than a voluntary approach?  And can the federal government afford to make those kind of guarantees? 

Recently a panel of experts debated those notions on Ideas in Action, a new half-hour weekly series on ideas and their consequences.  Joining the discussion were the New School’s Professor Teresa Ghilarducci, Employee Benefit Research Institute (EBRI) CEO Dallas Salisbury, and Alex Brill from the National Commission on Fiscal Responsibility and Reform. 

You can watch the program at

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