
Contents
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1 Narrowing the Discussion 1 Narrowing the Discussion
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2 The Emergence of 401(k) Plans in the United States 2 The Emergence of 401(k) Plans in the United States
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2.1 The Outlook for the US Social Security System 2.1 The Outlook for the US Social Security System
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2.2 The Changing Nature of Employer Pension Coverage 2.2 The Changing Nature of Employer Pension Coverage
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2.3 Reasons for the Shift from Defined Benefit to 401(k) Plans 2.3 Reasons for the Shift from Defined Benefit to 401(k) Plans
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2.4 Implications of the Shift to 401(k) Plans for Retirement Income Security 2.4 Implications of the Shift to 401(k) Plans for Retirement Income Security
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3 The Shift to Money Purchase Plans in the United Kingdom 3 The Shift to Money Purchase Plans in the United Kingdom
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3.1 The Basic State Pension 3.1 The Basic State Pension
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3.2 The Introduction of Money Purchase Accounts 3.2 The Introduction of Money Purchase Accounts
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3.3 Scandal and Reform of Money Purchase Accounts 3.3 Scandal and Reform of Money Purchase Accounts
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3.4 Labour's Reaffirmation of Private Plans 3.4 Labour's Reaffirmation of Private Plans
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3.5 The Decline in UK Defined Benefit Plans 3.5 The Decline in UK Defined Benefit Plans
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3.6 The Current State of the UK Retirement Income System 3.6 The Current State of the UK Retirement Income System
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4 Conclusion 4 Conclusion
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Notes Notes
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References References
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18 Employer–Sponsored Plans: The Shift from Defined Benefit to Defined Contribution
Get accessAlicia H. Munnell is Peter F. Drucker Chair in Management Sciences in the Carroll School of Management at Boston College.
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Published:02 September 2009
Cite
Abstract
In a number of countries – particularly the United States and the United Kingdom – voluntary employer-sponsored pensions play a major role in supplementing relatively modest pay-as-you-go public pensions. And in both of these countries the nature of these supplementary plans has changed dramatically, as coverage has shifted from defined benefit to defined contribution arrangements. Understanding the strengths and weaknesses of alternative employer-sponsored pension schemes is useful for two reasons. First, in both the United States and the United Kingdom the shift to defined contribution plans has occurred against a backdrop of retrenchment of the relatively modest pay-as-you-go public social insurance programs, so it is important to determine the extent to which future retirees may be at risk. Second, many Continental European countries with generous pay-as-you-go public schemes have signalled an interest in moving some responsibility for retirement income to funded private plans, primarily using a defined contribution format, so it is helpful to learn what works and what does not.
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