The Washington Post ran an interesting article this past weekend on retirement plans. While the topic itself isn't revolutionary, it does raise a very interesting point: do 401k and other retirement plans put too much responsibility on the employee and/or the employer.
Let's take a look at both of these questions. Retirement plans certainly put a considerable amount of responsibility on the employee's shoulders, but surley it is his or her best interest to educate himself about retirement options and what works best for his particular situation?
The problem is that it's difficult to find honest information when it comes to financials. Contacting your banker or investor, and they're both likely to push financial solutions that are adapted to their bottom line.
On the other hand, it's hard to imagine that employers should be responsible for their employee's retirement plans. The key word here is "responsible" – HR departments can continue to facilitate relationships between employees and their selected insurance and financial groups. However, thinking long-term, it makes no sense of employers to become even more involved. As the WaPo points out, the United States social security system is living in a time warp using assumptions that have been in place since its creation in 1935.
One solution is to put the onus on the government to get social security right. The author of the article suggests working with retirement as a defined-contribution system and not a programmed event. I agree that a better system would take in to account partial usage for those at retirement age who wish to work and not use all of their savings.
In othr words, a tailored approach to social security seems to be a better response than the one-size-fits-all assumptions that have ill- served workers for far too long.