The Financial Crisis and Private Defined Benefit Plans

The brief’s key findings are:

• Defined benefit pension plans – unlike 401(k)s – shelter individuals against financial turmoil.

• But falling asset values may require employers to boost contributions by perhaps $90 billion in 2009.

• And higher contributions amid a slowing economy could trigger some layoffs, bankruptcies, or plan freezes – reducing retirement income for affected workers.

• Requiring firms to dramatically increase pension funding in a struggling economy does not make sense.