The Rising Interest in Defined-Benefit Plans Among Younger Workers
As the shortcomings of 401(k)-style defined-contribution plans become more apparent in the current economic climate, younger workers and some companies are showing renewed interest in defined-benefit pension plans. Only about one in 10 Americans in the private sector participate in a defined-benefit pension plan, while roughly half contribute to defined-contribution plans. However, job seekers are increasingly searching for employers that offer pensions, and companies are responding by mentioning pensions more frequently in job postings. The stability and long-term income provided by pensions are seen as advantages, especially in light of market volatility, inflation, and concerns about the viability of Social Security. Some companies, like IBM, are even restructuring their retirement benefits to include a cash-balance defined-benefit instrument alongside their 401(k) plans.