Younger boomers face the greatest risk from an accelerated shift to defined contribution (DC) from defined benefit (DB) pension plans. While most older boomers will see modest changes in retirement income as a result of this shift, the decline in DB coverage will reduce retirement incomes for at least 10 percent of younger boomers.
These are the latest findings from the Center for Retirement Research at Boston College in a recent report titled “The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Boomers.”
Between 1980 and 2008, the proportion of private wage and salary workers participating in only DC pension plans jumped from 8 percent to 31 percent, according to U.S. Bureau of Labor statistics. Experts predict most private sector DB plans will be frozen in the next few year and eventually terminated, according to the Center’s report.