The number private-sector employees who are enrolled in a defined benefit plan dropped from 38 percent in 1979 to 15 percent in 2008, according to a EBRI study.
While 1997 marked the largest decline, there are new causes as to why these defined benefit sponsors are re-evaluating the costs and benefits of providing retirement benefits through tax-qualified defined benefit plans.
In 2010, EBRI found that an overall adequate retirement income for households currently ages 36–62 had greatly improved since 2003, partly because of automatic enrollment and automatic escalation in 401(k) plans. Despite this, nearly half of baby boomers and Generation X were said to be at risk having insufficient retirement income for the most basic expenses and uninsured health care costs.
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Based on preretirement income, respondents in the low-income were classified as "at risk," and 41 percent of those in the expected to run out of funds within the first 10 years of retirement.
According to earlier EBRI studies, the at-risk probability for Gen Xers ranges from 60 percent for those with no defined contribution plan eligibility left to 20 percent for those with 20 or more years. Still, the studies have never been used to quantify the significance of accruals in defined benefit plans. Ultimately, responses from all baby boom and Generation X households were analyzed, and it was determined that the general inclusion of a defined benefit accrual at age 65 lessens the at-risk percentage by 11.6 percentage points.
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