Rethinking the Risk of Defined Contribution Plans

In response to pension funding failures and concern that abuses in the private system were denying benefits many workers, Congress passed Employee Retirement Income Security Act of 1974 (ERISA). ERISA has several specific objectives: ensure workers receive after they satisfy certain minimum requirements, sufficient funds are set aside pay promised benefits, adequate information about their employee benefit plans, higher standards conduct for those managing funds. been successful accomplishing its goals. Today employees vest earlier, more plans adequately funded, plan participants knowledgeable retirement benefits. Moreover, since passage ERISA, increased participation contribution rates have caused average income retired individuals be comparable rest population.