FYI: American workers of the old, industrial economy expected to work for the same employer until reaching retirement, and then to be taken care of in their old-age by that same employer via a defined benefit (DB) pension plan. With the passage of the Employee Retirement Income Security Act of 1974, the shift towards defined contribution (DC) plans began to accelerate, and now they predominate. DC plans don’t “define” the benefits to be received by the retiree – but instead define the employer’s contributions to the retirement account. From there, it’s up to the retirement account’s performance to “define” the employee’s retirement benefits.
Regards,
Ted
http://dailyalts.com/dc-plans-add-alternatives-according-bny-mellon/
