The endangered defined benefit plan nears extinction
While much of the local and national talk around pension reform is directed at public employees, the biggest current changes are occurring in the private sector.
That evolution is particularly sharp for defined benefit plans, those that offer retirees a set income post-employment. The traditional pension that many Americans once considered a birthright has declined for decades. U.S. Department of Labor figures show defined benefit plans peaked in 1980 and covered about 38 percent of all private sector U.S. workers before falling to about 20 percent of the nongovernment workforce by 2008.
“There has definitely been a retraction in the offering of defined benefit plans, both nationally and in this region,” says Allen Knott, vice president of sales for the Sacramento office of the Principal Financial Group. “For the few out there, we’re seeing either a hard or soft freeze, with the ultimate goal of terminating the plan.” (click to continue reading)
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