In March of this year the Employee Benefit Research Institute (EBRI) issued its 20th Annual Retirement Confidence Survey. The results resoundingly reaffirmed the value of, and need for, the type of retirement security that can only be provided by defined benefit pension plans, such as the Central Pension Fund and the network of IUOE Local Union plans throughout the United States and Canada.

First the survey found that in 2010 the percentage of workers who felt very confident about having enough money for a comfortable retirement remained at the 20 year low point registered in 2009 at only 16%.

More disturbingly, more than a quarter of all workers (27%) reported having less than $1000 of retirement savings; and more than half (54%) have less than $25,000 saved for retirement.

Consistent with this historically low level of retirement confidence, the study found that more and more workers expect to retire at later and later ages.  At the time of the first EBRI survey in 1991, only 11% of all workers expected to retire after age 65.  By 2005 that percentage had grown to 24%.  And the 2010 Survey finds that fully one-third (33%) of all workers now expect to work past age 65.

It is not surprising if more than half of all workers have saved less than $25,000 for retirement, that one-third of all workers expect to work beyond age 65.

This decline in retirement confidence, low level of retirement savings, and reduced expectations for age 65 retirement are all related to the same cause --- the decline of defined benefit pension plans.

Over the twenty year history of EBRI’s Annual Survey there has been a major shift by employers away from defined benefit plans --- that provide a monthly benefit for life --- to 401(k) plans that are merely tax deferred savings accounts.  401(k) plans are preferred by employers because they are cheaper; defined benefit plans are preferred by workers because they are safer.

As a result of employers’ preference for 401(k) plans, where workers are not represented by a union and have no influence over their wage and benefit packages, defined benefit plans are dwindling --- as is retirement confidence.

Indeed, one of the most telling findings of this year’s Annual Retirement Confidence Survey is that, while only 37% of workers reported that they and/or their spouse is currently covered by a defined benefit pension plan, 56% expressed an expectation that they would receive benefits from a defined benefit plan in retirement.  Why would 56% expect a defined benefit plan pension when only 37% are covered by such plans?  The authors of the Survey explained this disparity as follows: “the difference of 19 percentage points may be based on the expectation of receiving the benefit from a future employer --- a scenario that is becoming increasingly unlikely, since private-sector employers in particular have been cutting back on their defined benefit offerings”.

Fortunately, members of the International Union of Operating Engineers are not left with just a hope for defined benefit pension coverage, it is already available through the IUOE’s network of defined benefit plans .