Depending on whom you ask, Rep. George Miller (D-Calif.) is either championing or undermining the nation's 401(k) system. To see how the lawmaker got to the point where he had to release a November statement in support of what should be obvious - making sure "our retirement system is as strong as it can be for our nation's workers and retirees" - you have to go back to one congressional hearing of the House Committee on Education and Labor that Miller held over three months ago.

October surprise

The hearing, held in October - just weeks before Election Day and weeks after the September slide of the financial markets into near collapse - focused on how to shore up Americans' retirement security amid the economic crisis.

Miller, as committee chair, presided over testimony from various economic and retirement experts, including Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research.

Although the hearing appeared otherwise unremarkable, Ghilarducci's testimony was news-making.

"The sooner we admit that our 30-year experiment with 401(k) accounts has failed, the sooner we can use these precious government subsidies efficiently and equitably," she said. "I want to stop the federal subsidy of 401(k)s; 401(k)s can continue to exist, but they won't have the benefit of the subsidy of the tax break."

Ghilarducci's alternative: Establish guaranteed retirement accounts that every worker would be required to contribute 5% of pay and supplemented by an annual $600 contribution from the federal government.

How the proposal got so firmly attached to Miller is unclear.

Although he's on the record for supporting 401(k) tax breaks in their current form, Miller never expressed explicit support of Ghilarducci's proposal.

However, the congressman has been on the defensive ever since against multiple critics of Ghilarducci's plan, including U.S. News blogger James Pethokoukis, who called Ghilarducci the "most dangerous woman in America."

Jane White, former EBN columnist and President of Retirement Solutions LLC, says: "Her proposal is another example of the extreme innumeracy on the part of those who affect economic policy. On the political right you have the stance that stocks are magic, and on the left you have the 'stocks are scary' stance that would replace an already puny 3% 401(k) employer match -the second lowest in the world -with an infinitesimally puny $600 worth of government bonds. And because government bonds pay such a poor return, she's having the taxpayers subsidize the return."

Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America - which represents employers offering 401(k) plans - says, "We are strong supporters of the voluntary, employer-provided system. But beyond that, the plan she's proposing is extremely lacking in its discussion of tax policy."

Following the stinging criticism, including a November Wall Street Journal editorial that stated, "If Democrats want to improve the prospects for American retirees, their first priority should be removing barriers to economic growth," Miller distanced himself from the proposal publicly.

In a press release, Miller said, "I do not support 'abolishing' 401(k)s, moving these plans or changing their tax status."

Now what?

The furor over Ghilarducci's plan has died down significantly, leaving employers with the same question as in October: How can they help employees effectively save for a secure retirement amid such economic turmoil?

Lynn Finkelstein, national director of Ernst & Young's Employee Financial Services, says that employers absolutely must offer employees not just a retirement plan, but also independent financial planning and advice services, as employees have many questions now about their asset allocation and how to prioritize competing saving goals.

"We've been extremely busy - we field about 750 to 1,000 calls a day," she estimates.

Finkelstein advises employees to save first for retirement, then pay down debt, then put money aside for children's educations.

College saving comes last, because "it's like being on an airplane. They tell you to put on your mask first, then your child's mask." Plus, she says, "there are no grants, no scholarships, for retirement."

Employers have to do a better job of communicating that financial planning is something all employees can benefit from, Finkelstein says. "It can help every employee, not just people with millions of dollars."

She also encourages employers to continue pressing retirement saving and education for employees even after the economy improves. "Don't let it become a second, third or fourth priority when things do change. It can have a tremendous impact on your future."