Pensions Are Losing Popularity Los Angeles Times Online (03/18/02) p.B1; Weston, Liz Pulliam
The Employee Benefit Research Institute surveyed workers and discovered that only 6 percent believed defined-benefit pension plans were essential, compared to 25 percent who thought 401(k)s were. Traditional pension plans are on their way out as costs increase and employees rely more on stock options and 401(k)s for retirement savings. However, many financial experts conclude that 401(k)s should be a supplement rather than a substitute for traditional plans because the stock market is not always going to be on the rise--as we have seen in recent years. As the manufacturing sector has lost economic importance, so have unions and traditional pension plans, even though many of the plans are covered by the Pension Benefit Guaranty Corp. Analysts contend that many companies that have failed to make contributions to their plans in the past will either freeze or discontinue their plans--preventing current members from accruing further benefits and new employees from joining.