When offered a choice, most younger professors opt for defined-contribution plans, perhaps making them more likely to work longer.
Singapore and Malaysia, for instance, have opted for defined-contribution public-sector pensions, Chile and Argentina for defined-contribution private-sector pensions with individual accounts.
GE wants union members to give up defined benefit pension programs in exchange for defined contribution programs.
The research showed that the average combined employer and employee contribution level for a defined-contribution scheme in a small firm ranged from 7.6 per cent to 9.3 per cent of earnings, substantially lower than for defined benefit pension schemes, where the number stood at 24 per cent.
The maximum was also raised for people in defined-contribution Keogh plans.
Lawmakers also recognized that — for many workers — defined-contribution plans like 401 k)'s were replacing traditional plans.
With defined-contribution plans employees instead accumulate a cash pile during their working life to pay for their own pensions.As defined-contribution plans are more attractive for employers, why did companies not make the switch earlier?
Equally important for folks who have been funding a defined-contribution plan for years: You can ignore the defined-contribution plan's existing balance in accumulating your $1.9 million.
That is almost certainly still a better deal for workers than a defined-contribution pension.
Many traditional company pension plans, for example, are being replaced by defined-contribution plans like 401 k)'s.
