Back in the stone ages, once companies reached a certain size, they were obligated to provide a retirement plan. They needed to offer the promise of a worry-free old age in order to compete with other companies for workers.
The promise didn't have to actually be fulfilled. Indeed, there were so many employment provisions in traditional pension plans that far fewer retirees realized the benefits promised them than many today assume. Still, pensions became such a liability that companies – as a result of shareholder behavior – sought to ensure sustainability by replacing defined benefit plans with defined contribution plans.
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