The National Institute of Retirement Security contends in a new pension research guide that the shift away from defined benefit pension plans and toward defined contribution plans is hurting many Americans who are close to retirement.
NIRS, Washington, a not-for-profit that studies retirement security, spotlights the role of DB plans in today's world of growing private-sector use of DC plans.
Benefits from traditional DB pensions go a long way toward providing for the retirement security of Americans, NIRS researchers write.
Pointing to data from the Social Security Administration, they say that Social Security and DB income "remain the largest and most significant sources of retirement income for the current elderly population.
"Among all Americans aged 65 and older, DB pensions make up 17.7% of their current income, while Social Security makes up 36.7%," and, for public sector workers who do not pay into Social Security, DB pensions are even more important, the researchers say.
By comparison, the researchers say there are indications that older baby boomers who are close to retirement and have income only from DC plans are in a less secure position than their DB counterparts. They cite one study that found such boomers are at greater risk of being unable to maintain their pre-retirement standard of living than those with income from DB plans.
