The Importance of Pensions

Volume CVIII, No. 4April, 2008

What should you understand in order to prepare adequately for retirement? We have prepared an economic learning video about the importance of pensions and social security to retirement income security and the role of unions in history of America’s retirement. This is a very important issue and we recommend that every working musician receive the information it contains. Over 2000 musicians viewed this piece in 2007.

Here is a link to this important item. Union Pensions – The AFM-EPF Click on the image to play the video.

The reality is that more than half of Americans in the middle third economically will not have 75% of their pre-retirement earnings to live on when they retire and nearly half of the top third of the population by income are “at risk”. When health care costs are factored in, prospects for senior independence and “the good life look severely constrained.

In a study released in February 2008 economists at the Center For retirement Research at Boston College1 published the latest index as adjusted for medical costs. The results are a sobering assessment of how economically unprepared we are as a society for retirement. After years of improvement the retirement years of a majority of the population will no longer be comfortable in retirement.

Income Group


Early Boomers

Late Boomers

Gen X’ers






Top Third





Middle Third





Bottom Third





Boston College economists also broke down the risk to populations by age. By far the greatest increases to being at risk are the young. The economists identified the major reasons for a 40 percent increased risk for the young in the labor force as the replacement of defined benefit pensions by employers with 401k or 403B personal savings plans that do not pay as well as defined benefit pensions for people with increased life expectancies. To see the complete study click here.

For more of this story click here: Union Pensions – The AFM-EPF

The National Retirement Risk Index (NRRI) is an economic measure of the retirement income security of Americas working households. The index is a predictive measure of the economic health of America’s retiree’s and has been has been in existence since 1983. At it’s basic level it is a measure of the ability of a household to have 70% of pre-retirement income coming in after retirement. Households forced to make do on less than 70% of pre-retirement income face adjustments consider to be disruptive and even painful. These are the households that are “At Risk”.

These are sobering statistics that should make all of us aware of how important building a pension benefit is. To learn more about your pension click here: Union Pensions – The AFM-EPF

1 “Health Care Costs Drive Up the National Retirement Risk Index”, February 2008 ,Center For Retirement Research at Boston College click here for the full text