I do get it. A 9.8% return is as good as most diversified portfolio out on the market. You are comparing the rate of return for stocks only. You don’t consider bonds or the virtues of a balanced portfolio ? I think teachers who are in their late 40s and nearer to retirement have a different perspective than a 25 yo might.
The teacher’s plan you discuss is more explicitly stated as to where the contribution comes from. Do you think any company does not consider pension contributions as a part of total employee compensation, and adjust gross salary accordingly ? In the business world, workers are considered to get more money in salary if there is no employer defined-benefit pension than those workplaces who have 401(k) only plans. And no, many employers do not have a company match(I can’t find any statistics on any %s of employers who do have 401k matches). Some employers contribute company stock only. Think Enron. How did that work out for those employees ?
http://www.econ.brown.edu/econ/sthesis/MattPapers/Paper8.html
82% of all companies offer some level of match, with 3% being average.