These folks wouldn’t . What’s in your 401K?
The case is a cautionary tale offered up by the investing experience of the West Virginia teachers over the past 17 years. This was a predominantly college-educated workforce, and yet for the majority, their returns fell well short of what was needed to secure a decent income in retirement.
You can look at what’s happened in West Virginia as a scary microcosm of a 401(k) system that has now become the only retirement plan for millions of American (mostly private-sector) workers. And for most, it’s not coming close to generating enough money to fund a decent retirement lifestyle.
Public sector employees like the West Virginia teachers are quickly becoming the only Americans left with decent pensions. But the problem is that private-sector taxpayers have to foot the bill, while at the same time, their own retirements are going to pot.
I am reminded of a comment that Dallas Salisbury, the president of the Employee Benefit Research Institute, made to me a few years back: "The public employee, no matter who you compare him to, has become the dominant sector of the labor force that is well pensioned and well benefited," he said. "And the real question is, At what point, vis-a-vis tax burden, does the nonpensioned public start to pay attention to that as voters?"