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Central Pension Fund Retirement Confidence Survey Not Encouraging In April of this year, the Employee Benefit Research Institute (EBRI) released its 14th Annual Retirement Confidence Survey. The results were not encouraging. Members of the International Union of Operating Engineers are fortunate to have real retirement security available through the network of defined benefit pension plans maintained by the International and its Local Unions throughout the United States and Canada. However, statistics show that in the United States only 14% of non-union workers are covered by defined benefit plans. The other 86% either have no pension plan coverage, or risky 401(k) coverage. The results of the EBRI survey demonstrate this non-union work force faces bleak prospects for retirement. The Survey found an alarming lack of individual retirement savings. It found that a majority of workers believe that they are saving enough for retirement --- but they are not. The Survey found that workers have a number of misconceptions about retirement that contribute to their failure to adequately prepare. For instance, the Survey found that more than half of workers expect to work until age 65 or older and almost 70% expect to work in retirement. In reality, however, the Survey found that the average retiree retires at age 62, and 4 in 10 left the work force earlier than they had anticipated for unexpected reasons, such as health problems or company downsizings and closures. Accordingly, while workers expect to be able to work longer before retiring and to work after retiring, such expectations are not realistic. Likewise, unrealistic are workers expectations of the adequacy of their retirement savings. Almost 70% of the workers surveyed said they have saved monthly for retirement, and the same percentage said they were either confident or somewhat confident of having enough money for a comfortable retirement. National statistics indicate these expectations are false. A 2001 National Survey of Consumer Finances found that, after deducting the value of their primary homes, the median value of family assets is only $47,000. The EBRI Survey had similar findings including the fact that 45% of all those surveyed had total household assets, excluding the value of their homes, of less than $25,000. Clearly, without a defined benefit pension to rely on, $25,000 will provide little retirement security. The EBRI Survey once again demonstrates not only the need to save for retirement, but also the need to maintain and enhance the system of defined benefit pensions. Unfortunately, the savings rate continues to be woefully inadequate, and employers are continuing to abandon their defined benefit plans in favor of 401(k) plans. Fortunately, however, for members of the International Union of Operating Engineers, General President Frank Hanley and the leaders of IUOE Local Unions throughout the United States and Canada are firmly committed to maintaining and strengthening the IUOE’s network of defined benefit plans. Originally published in the International Operating
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