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Americans support pensions for all; union members more likely to have benefits


Seventy-seven percent of Americans agree that all workers, not just state and local government employees, should have a pension, according to a new national survey conducted by the National Institute on Retirement Security (NIRS).

The breakdown by political party is consistent, with 80 percent of Democrats, 75 percent of Republicans and 78 percent of Independents agreeing all workers should have access to a pension.

“Our research shows that Americans understand that pensions offer more than retirement security – they are a key workforce tool to help attract and retain employees,” said Dan Doonan, NIRS executive director and report co-author. “State and local governments typically offer lower salaries than the private sector, so retirement and healthcare benefits act as employee magnets. We also found interesting that nearly half of Americans say that public sector retirement benefits are about right (46 percent), while about one-third (31 percent) say the benefits are too low.”

Unions can play a vital role in retirement. Research shows that being a union member means you are more likely to have access to retirement benefits.

Ninety-four percent of civilian union workers and 67 percent of nonunion workers had access to retirement benefits through their employer in March 2019, according to the Bureau of Labor Statistics. Access means the benefit is available to employees, regardless of whether they chose to participate.

The Bureau states that 85 percent of union workers and 51 percent of nonunion workers participated in an employer-sponsored retirement benefit plan. The take-up rate, or the share of workers with access who participate in the plan, was 90 percent for union workers and 77 percent for nonunion workers.

Funding for state and local pensions comes from employer contributions, employee contributions and investment earnings. The NIRS survey states that between 1993 and 2018, about 25 percent of public pension fund receipts came from employer contributions, 11 percent from employee contributions, and about 64 percent from investment earnings. Earnings on investments historically have made up the bulk of pension fund receipts, even during two market downturns, and taxpayers are funding only a portion of these benefits, the survey stated.

The modern pension in the United States dates back to 1875 when the American Express Company established the first corporate pension. Banking and railroad companies followed suit, offering their employees pensions and by the turn of the 20th century several large corporations were offering the benefit. In the 1940s, labor unions joined in and began pushing for an increase in the benefits offered.

There have been arguments recently that contend increasing union membership could bolster the economy and retirement funds.

“As the unions themselves are saying, we need smart pension reform,” said Russell Kamp, managing director of asset/liability management firm Ryan ALM, in the article The Argument to Save Pensions by Saving Unions. “The previous reforms under MPRA [the Multiemployer Pension Reform Act of 2014], in my view, have ultimately harmed participants and beneficiaries. We have seen sizable reductions of promised benefits, and so, we need further reform that works in the interest of participants and beneficiaries. We need pensions, those operated by unions and individual employers, to be a healthy and stable retirement vehicle for a growing workforce.”

Retirement benefits shouldn’t be overlooked and left to fall by the wayside. They are vital to living comfortably after leaving the workforce. The AFL-CIO makes Social Security and retirement a priority.

“Unions of working people advocate for strong pensions, expanded Social Security benefits and adequate wages so people can build up retirement savings over the course of their careers,” the website states.