In an earlier post with the same headline, I cited the decline in the number of defined benefit pension plans from 1985 to 2005: from approximately 112,000 to 29,000.
I’m certainly not the only one who has commented on the passing of defined benefit pension plans. Today Robert Pozen, Chairman of MFS Investment Management, in a speech to the Society of Professional Recordkeepers and Administrators in Palm Beach, Florida predicted the demise of defined benefit pension plans. Precipitated, he said, by law changes, new accounting rules, and funding shortfalls.
But Mr. Pozen expressed the situation in a manner to which we could all better relate. Where will retirement income come from:
- In 1974, 56% of retirement income came from Social Security and defined benefit plans.
- By 2030, only 24% of retirement income will come from Social Security and defined benefit plans.
Starting saving Gen X!
Source: Investment News, November 6, 2006.