Pension Wealth and Income: 1992, 1998, and 2004
IB#8-1
Introduction
What is the impact of the shift from defined benefit to defined contribution plans on the pension wealth of households approaching retirement? Using data from the Health and Retirement Study, this brief documents this shift and compares employer-sponsored pension wealth across households with heads age 51-56 in 1992, 1998, and 2004. The results show that, for the average household, both pension wealth and replacement rates — the ratio of annual benefits to pre-retirement earnings — fell between 1992 and 2004.
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Olga Sorokina is a research assistant at the Center for Retirement Research at Boston College (CRR) and a graduate student in Economics at Boston College. Anthony Webb is a research economist at the CRR. Dan Muldoon is a research associate at the CRR.