By Eileen L. Griffin

A recent Wall Street

Journal column attempted to dispel the myth of an impending retirement crisis

in the United States. It said most private sector employees are well prepared

for retirement, having saved and invested for many years with both

employer-sponsored plans and Individual Retirement Accounts. Recent data

indicates 61 percent of workers and 80 percent of married couples now

participate in a defined benefit plan. Employer-sponsored plans and IRA

accounts have been growing at record levels, according to the column. Employers

have played a role in the improved overall retirement picture, as many have

become more generous in their support of their defined benefit programs for their

employees. With unemployment rates at historical lows, this trend is expected

to continue as retirement programs have become significant influencers on

recruitment and retention strategies for many employers. If this positive

assessment is true, then why the hysteria about retirement?

The

World Economic Forum reports that 85 percent of the retirement gap in the U.S.

is due to government underfunding public pensions. While Americans in the

private sector have continued to increase savings and employers have expanded

their support of 401(k) and other private retirement plans, the

government-managed retirement plans are in disarray. While private sector

employers have encouraged and trained their employees to use the 401(k)

benefit, many public employees are not offered the same level of communication

on saving and investing for retirement. They are expecting that their needs

will be met through their government pension plan.

As a result of the

contrasting philosophies, we are expanding into two entirely different

employment cultures where those employed by the public sector anticipate the

“promise” of a pension and those used to managing their own retirement planning

are positioned to support themselves in retirement. This different mindset

begins early and could result in different perspectives and expectations of

government.

One might question

how employers became involved in the retirement of their employees, a point in

time after they leave their jobs. What level of responsibility does an employer

have to prepare their people for retirement?

During

market shifts from defined contribution to defined benefit, many employers

accepted a role in offering retirement programs, but rather than providing an

income, they have become the educator and trainer, leading employees toward

conscientious retirement planning and building good habits along the way. 

Employers in

wide-ranging industries often will offer training or access to financial and

retirement planning information to guide their employees into making good

finance and retirement decisions. They do this, not because it is mandated, but

because it makes sense. It is good business to encourage self-responsibility

and independence, while providing tools to meet that end.

While the private

sector has continued to experiment with benefits that improve the lives of

their employees, the public sector has largely depended on the antiquated, and

unfunded, pension system. The concern this raises, of course, is that the

unfunded liabilities will result in many not being provided with the retirement

they were promised during their career. Alternatively, the private sector may

be “asked” to participate in the support of public sector employees to ensure

that there truly is no “retirement crisis.”

Retirement is the

wild card of the personal life cycle. No one can be certain what those years

hold and there are more potential pitfalls than in the other stage of life. An

evolved civil society should care for the weakest among us, including our

elderly. Those in their earlier years still can recover from lost income or

recoup after a broken promise. They can still go back to work and earn income.

Many elderly people can not and have few options for increasing their income.

While we can hope

that public pensions will become funded at the necessary levels in the future,

it may be wise for all Americans to save and plan for their own retirement.

Small employers, particularly, may find it difficult to provide life skills

training and personal development when taxed with just keeping up with job

skills and job training for their employees. Those employers in the private

sector already leading in this area can be a resource for others who do not

have the expertise or resources to train their employees on retirement basics.

The difference

between retirees in the future may be their choice of employer in the past. It

may be that public sector employees will be expected to accept a partial amount

of the income expected or they will need to work longer than planned. All

retirees should have the opportunity to enjoy the fruit of their labors and the

gratification after years of toiling. All retirees should benefit from their

contributions with a safe and secure series of golden years. No one wants to

see elderly people living in poverty.

While no one person

or employer can change the dire situation that the government pension system

seems to find itself in, we can consider self-reliability and individual and

community resources. To some degree, the public sector crisis can be mitigated

by taking ownership of our retirement planning. Regardless of the support we

think we should be getting from a government entity, Social Security included,

it may be best to consider our own accountability and prepare to be responsible

for our own twilight years. That may take some serious discipline during early

employment.

The dependence on

government retirement programs may be one of the factors influencing the

population more willing to accept a system of control and dependence, contrary

to our national culture. Before this outlook takes further root in our society,

we should consider reflecting on the importance of independence and nature of

freedom.

Careful, thoughtful planning and a sense of self-responsibility may be the way individual Americans overcome the potential aggregate crisis. Employers of all sizes can influence the lives of their employees well beyond the years of employment. That employment bond can continue and dividends result in goodwill that can manifest itself in things like recommending the employer to friends, families and neighbors and speaking highly of the company in the community. Beyond the business benefits, just knowing that, as an employer, you guided your employees toward a fulfilling retirement can be gratifying in and of itself.

Eileen L. Griffin has more than 20 years of management experience. She holds a master’s in business administration and is a doctoral student at Gonzaga University, School of Leadership Studies. She serves as the director of wealth management at Gesa Credit Union.