The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Boomers
This project will assess how a potential reduction in defined benefit (DB) pension plan offerings in coming years, accompanied by increases in defined contribution (DC) plans will affect the distribution of retirement income of future retirees. We will use a microsimulation model to simulate three potential DB pension reduction scenarios. We will evaluate the number and characteristics of winners and losers under the alternate scenarios. We will also simulate the effects of different assumptions about take-up rates and contribution rates to DC plans, taking account of potential effects of the new trend to use automatic enrollment with an “opt-out” feature instead of requiring a positive choice to participate.