Workers today are more likely to receive retirement income from private-sector retirement plans than they were before the passage of ERISA in 1974, according to a report by the Investment Company Institute.

"The importance of private-sector DB pensions in providing retirement income is often exaggerated," the report said. "The time before the emergence of 401(k) plans in 1981 has been characterized by many as the golden age of the golden watch: a time when most private-sector workers retired with a monthly pension check that replaced a significant portion of their pre-retirement income. Against this standard, 401(k) plans are judged to be falling short."

That "golden age," the report said, was more myth than fact. Today, a larger percentage (32 percent vs. 21 percent) of people receive retirement income either directly or through a spouse, and the amount received also has risen. Last year, the median annual income per person was $6,300 compared to $4,800 in 1975 (adjusted for 2012 dollars).

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.