As you can see from the views expressed below, depending on your perspective, the 401k is a success or not a success. Part of the perspective is politics as you can see from the bold text below.
But the essence of the difference is financial education and individual actions.
There is no logical reason a 401k cannot work, especially with an employer match. Keep in mind that a good traditional pension is funded at about 8% of payroll, so while a pension (properly funded) is what most people would like simply for the peace of mind and “guaranteed” income stream, properly done a 401k can accomplish the same results and more.
The problem is most workers don’t know how to get to “properly done.”
“Over the years, 401(k) plans have proven to be a successful keystone of our nation’s retirement system. The 401(k) system is rooted in conservative economic principles: ownership, personal responsibility, simplicity, convenience and optimism in American prosperity. Virtually all workers at large employers have access to a low-cost, private retirement account.
The cost and complexity of setting up these accounts, however, discourages many small businesses from offering this straightforward benefit. Many of America’s small business owners find it too onerous, too risky and too costly to offer retirement options for their employees.
A report from the Government Accountability Office (GAO) shows that employers cited regulatory complexity and fear of liability as major impediments to offering a retirement plan. A survey from the Pew Charitable Trusts found that 71 percent of small and medium-sized businesses that do not offer retirement plans cited high costs as a reason.
Although large employers frequently offer retirement plans to help employees save, only 14 percent of small employers currently offer a retirement plan, according to the GAO. One study shows that nearly 75 percent of workers without a workplace plan have no retirement savings — putting their financial security in retirement in serious jeopardy.” Quote from the US Department of Labor
“But shifting the responsibility for growing retirement income from employers to individuals has proved problematic for many American workers, particularly in the face of wage stagnation and a lack of investment expertise. For them, the grand 401(k) experiment has been a failure.”
Source: For millions, 401(k) plans have fallen short