Tag: defined contribution
As the role of 401(k) plans and similar defined contribution plans continues to expand in our retirement system, plan participants are paying more of the cost of financing their retirement income. The increase in individual payments takes two forms. First, in old fashion defined benefit plans, employers made all of the contributions; in 401(k) plans,…
Abstract This paper estimates the short-run impact of the Pension Protection Act of 2006 (PPA2006) on holdings of employer stock in defined contribution pension plans. PPA2006 allowed participants in plans with employer stock to diversify their holdings. However, stand-alone ESOPs, i.e., those that do not allow employee elective deferrals or after-tax contributions, were exempt from…
