America is facing a crisis as declining wages, rising health care costs and a dwindling number of pension plans threaten working Americans' retirement security.

It is estimated that a couple retiring at age 65 today will need at least a quarter of a million dollars to cover medical costs alone.

For IBEW members with collectively bargained retirement benefits, the future looks much brighter. But guaranteeing a secure future requires multiple tools and strategies.

Since its introduction in 2008, the National Electrical 401(k) Plan (NEFP) has provided members and signatory employers the opportunity to boost retirement savings, giving working families an extra sense of security in these uncertain economic times.

"It's not a replacement for traditional defined benefits plans, but a supplement to help make sure everyone has enough in retirement," said IBEW Investments Department Director Jim Smizer.

Smizer refers to the NEFP as one of the legs of the three legged retirement stool — which also includes traditional pensions and Social Security — that experts recommend for a secure retirement.

The plan — jointly sponsored by the IBEW and NECA — is available to all bargaining unit employees of companies and contractors that have it included in a collective bargaining agreement. Non-bargaining unit employees of employers who have signed a participation agreement with the NEFP are also eligible to join.

Participation is voluntary. Individuals choose the percentage of their wages they want to contribute, and the employer deposits the monies — on a pretax basis — in individual retirement accounts. There they grow tax-free until distribution.

The benefits of the plan are numerous:

• Because contributions are made before taxes are calculated, participants end up paying less in federal taxes.
• Your money works for you. Funds put into the NEFP grow tax-deferred.
• Compounding helps your money grow. Compounding means participants can earn interest on both the money they contribute to the plan, in addition to any interest on contributions made in previous years.
• NEFP offers participants numerous options for investing, depending on an investor's age and how conservative or aggressive their investing style is. You don't have to be a trading expert either, with many easy-to-use investment strategies available, including GoalMaker, an optional tool that helps you make the right decisions about your portfolio.

The plan is administered by the IBEW; Prudential Retirement is the record keeper.

For business managers looking to give their members more retirement options, the NEFP can save them money and time. Administering a 401(k) costs a lot in terms of time and money including higher investment management and administrative annual fees. The NEFP is designed to help both of these issues because it enables IBEW locals throughout the country regardless of their size to join with others to leverage the relationships and experience of the IBEW International.

IBEW International Secretary-Treasurer Sam Chilia, who is also an NEFP trustee, says that the IBEW remains committed to the defined benefit plan as a bedrock of retirement security, but the "NEFP offers business managers and members a cost-effective way to increase savings and supplement existing benefits."

"It's always a smart move to start saving today," Chilia said.

To find out more contact the IBEW Investments Department at 1-888-411-4239 or go to the NEFP website: www.nefp.org.