Teresa Ghilarducci, author of When I’m 64, writes that states should expand public pension programs in the NY Times

Writing in response to the NY State Legislature’s recent move to limit pensions for future public employees, PUP author Teresa Ghilarducci writes in the NY Times “Don’t Cut Pensions, Expand Them”: http://www.nytimes.com/2012/03/16/opinion/pension-funds-for-the-public.html.

Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone.

While the recession bears some blame for the looming retirement crisis, experts agree that the primary cause is more fundamental: Most workers do not have retirement accounts at work. Over half of the workers in New York State, more than four million people in 2010, do not participate in retirement plans with their current employers, while over half of American workers do not have pension plans at work.

For years Teresa has been making the case that there should be a new savings platform for American workers. In her book When I’m 64 she described Guaranteed Retirement Accounts–publicly managed retirement savings accounts funded by money from employees and employers. In the article, she explains why public pension plans not only provide greater coverage, but also greater benefits and security:

The benefits of public pension plans: usually outperform 401(k) plans and individual retirement accounts: large institutional plans pool workers of all ages, diversify the portfolio over longer time periods, use the best professional managers that aren’t available for retail accounts and have the bargaining power to lower fees and prioritize long-term investment.

The best part she saves for last: “since these plans would be financed by workers and their employers, there would be no cost to taxpayers.”

Sounds too good to be true, right? Well, Ghilarducci writes that some of these ideas are already becoming a reality in California where “California State Senator Kevin De León and Darrell Steinberg, the Senate president pro tempore, introduced legislation that would allow private-sector workers in California to enroll in a modest, state-operated retirement program financed by the workers and their employers — at virtually no cost to taxpayers.”

She also notes that John Liu  in his recent State of the State address called for a similar program to head off a looming retirement crisis.

To learn more about the complete picture of retirement savings plans, start by reading Ghilarducci’s book When I’m 64.