In June of this year, the Employee Benefit Research Institute (EBRI) published its 2001 Retirement Confidence Survey. This is the 11th year that the survey has been conducted, and its results show that as traditional defined benefit pension plans are being replaced by 401(k) plans, the confidence of workers in their retirement security is dropping.

These results once again emphasize the advantage of the retirement security offered to IUOE members through the network of defined benefit pension plans maintained by IUOE Local Unions throughout the United States and Canada.

EBRI is recognized as the only national nonprofit, nonpartisan research organization dedicated exclusively to public policy research on economic security and employee benefits issues. The annual Retirement Confidence Survey seeks to measure the level of confidence of workers in whether or not they will have adequate income to live comfortably throughout their retirement years. The survey also seeks to measure how well individuals are preparing for retirement. On both measures the survey revealed significant declines between the years 2000 and 2001.

The number of workers in the 2001 survey who were either somewhat, or very confident that they will have enough money to live comfortably in retirement dropped 14% between the 2000 and 2001 surveys. There was a similar decrease found in the number of those who are confident that they are doing a good job of preparing for retirement. And the percentage of workers who are not at all confident of having enough money for retirement nearly doubled from 10% in 2000 to 17% in 2001.

In addition to the drop in retirement confidence, the EBRI survey also found a sharp drop in the number of individuals who say that they are saving for retirement--from 75% in 2000 to 65% in 2001.

These declines in retirement confidence and savings are both products of the increasing reliance on 401(k) savings plans for retirement, and the sharp drops in the stock market and U.S. economy as a whole.

Over the last year 401(k) accounts have been beaten down by the losses in the stock market while, at the same time, the U.S. economy as a whole began to slump.

Accordingly, at the same time that workers have become more reliant on 401(k)s instead of traditional defined benefit plans, they have seen their account balances in their 401(k) accounts dropping while the prospect of unemployment has been rising. Viewed from this perspective it is not at all surprising that retirement confidence and savings have been undermined.

The results of the EBRI survey again highlight the advantages enjoyed by the participants in the International Union of Operating Engineers network of defined benefit pension plans compared to the increasing number of workers who must rely only on 401(k) savings plans for retirement.

In times of economic uncertainty and stock market declines, the defined benefit pensions of IUOE members continue to grow every hour that they are employed, without the requirement of personal savings and without the risk of personal investment decisions.

It is the power of collective bargaining that first created the IUOE network of defined benefit pension security, and it is the power of collective bargaining that maintains it.

Unfortunately, for workers without the power of collective bargaining, the trend to 401(k) plans, and the resulting erosion of retirement confidence is likely to continue.