Will 2024 Be The Year Of The Pension Comeback?

Defined benefit (DB) pensions are having a moment. Following IBM’s
IBM
recent announcement that the company will resume offering a pension plan to its employees, there is much speculation that other companies will follow suit. On the public sector side, the town council in Trumbull, Connecticut, earlier this month unanimously voted to resume offering pensions to its police officers to address worrisome staffing shortages after switching a decade ago to a defined contribution (DC) plan. There’s also an active debate in the Alaska legislature about returning to pensions for public employees as the state faces a deeply troubling shortage of employees who deliver essential public services.

It shouldn’t come as a surprise that employers are reconsidering pensions. The U.S. now is fully four decades into the 401(k) experiment, and it is abundantly clear that these plans just can’t do the retirement job alone. Most middle-class Americans are unable to accumulate enough savings to be self-sufficient in retirement without a pension.