Traditional Pensions on the Wane
October 7, 2002
Traditional defined benefit (DB) pensions are losing ground to defined-contribution (DC) models, according to recent findings from the Employee Benefit Research Institute (EBRI).
Studying trends between 1975-2001, EBRI found that although the number of total plan participants remained consistent and assets grew, the number of DB plans decreased by nearly 80% to 36,000 in 2001, compared to 175,000 in 1975.
Government regulation, risks associated with funding pension plans, and a greater employee appreciation for DC plans have spurred the DB decline.