FAQs About Benefits—Retirement Issues

What are the trends in U.S. retirement plans?

Since 1979, significant changes have occurred in the kind of employment-based retirement plan that workers participate in: Defined benefit plans have declined, while defined contribution plans have grown.

Figure 1 shows the percentage of all private-sector wage and salary workers in each type of retirement plan. For instance, in 2013, 33 percent of all private-sector workers participated only in a defined contribution plan (DC) and 2 percent participated only in a defined benefit (DB) pension plan. (11 percent had both a DC and a DB plan, and the residual percentage is the fraction of private-sector wage and salary workers who were NOT a participant in an employment-based retirement plan).

Including those who participated in both a DB and DC plan, 44 percent of all private-sector wage and salary workers participated in a DC plan, and 13 percent participated in a DB plan.

Defined contribution plans are individual account retirement plans whose value is based on contributions (by the worker and/or employer), and investment returns; the 401(k) is the primary example of a defined contribution plan.


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