I am not against the concept of defined contribution vs defined benefit. It solves a lot of practical problems as far as dealing with an unknowable future.
However 401k has been a disaster for our nation I think. It flooded a ton of money into markets that previously would have sat on the side lines, that has created a lot of growth yes, but also a lot of room massive capital destruction which in turn has created a need for massive interventions to prevent what would otherwise be near ruinous deflationary events, see 2k8.
Everyone wants to put the blame on something they can point at an rules they can superficially change because that is easy, but it wasnt just credit default swaps, liar loan bundling, etc. It was also that investment banks and reits using investor dollars to build giant homes most people could not really afford in the first place...
It is also not just presence of everyone retirement money in the financial market, vs a bank or some state, federal, or muni bonds. It is the fact that very few are free to manage their 401k themselves, and those that are are highly discouraged from doing so. Instead all that money goes into the hands of a few mega-brokers and fund managers. That turns them into market-makers rather than actors. They decide what sectors are hot and what are not. It isn't exactly like a command economy but it is more brittle because it the number of independent actors does not reflect investment quantity and diversity.
it poisons corporate politics because it inst Bob and Jane Smith's turning in their proxy form for their 100 shares, it is JPM voting millions of shares and/or abstaining.
This spills over into poisoning our national politics because companies are our big political donors, and commerce is a big part of everyone's life. People always talk about companies just trying to please their investors. Trouble is that used to be, us, even thought ultimately it is still us, who they are now really trying to please is BlackRock.
I believe we need to mandate 401k plans allow people a full brokerage account, where they can structure their portfolio anyway they like, from 10s of shares in individual stocks, to stuffing it all in ETFs, mutual funds, and bonds. If managers want to still default everyone into a target date fund and offer menu of growth, preservation, moderate return, etc fine; but everyone should be free to buy any publicly traded security, in their account.