Rethinking the 401(k)

Employers look to cut costs, workers crave stability following market crash

Last fall's Wall Street meltdown, which erased half the value of some 401(k) retirement plans, has whipped up some of the fiercest crosswinds the plans have faced in their three decades of existence...

There's little agreement, however, on what a new retirement system should look like.

Some on the left, like Morrissey at the Economic Policy Institute, have proposed "guaranteed retirement accounts." They would be funded by mandatory 5-percent contributions-half provided by each worker and half by his or her employer. The funds would be pooled by the federal government and invested using private money managers.

The federal government would guarantee a stream of income retirement, as it does with the Social Security program, according to a description of the plan written by Teresa Ghilarducci, an economist at the New School for Social Research.