Retirement Savings and Household Wealth in 2007
"About half of all workers in the United States participate in an employer-sponsored retirement plan of some kind, a proportion that has remained relatively stable over the past thirty years. Beginning in the early 1980s, however, employers began to move away from traditional pension plans – also known as defined benefit (DB) plans – to defined contribution (DC) plans, like those authorized under section 401(k) of the Internal Revenue Code. Unlike DB plans, which are required by federal law to offer a benefit in the form of a life annuity, DC plans are individual accounts that typically pay the employee a lump sum at retirement. In 2007, approximately 21 million workers in the private sector participated in defined benefit plans, while more than 40
million workers participated in defined contribution plans..."