Brief The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Boomers
Barbara Butrica, Howard Iams, Karen E. Smith, Eric Toder
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Over the last three decades there has been a steady shift from DB to DC pensions. The Pension Protection Act of 2006 may accelerate this trend. This paper examines the impact of an accelerated freeze on the retirement income of boomers. Simulations suggest that such a scenario would produce more losers than winners and reduce average retirement incomes. Income changes will be substantial among high-income workers, who have the highest DB coverage and pension incomes. Late boomers will experience the largest impacts, as they lose their high DB accrual years and have inadequate time to accumulate DC wealth before retirement.
Research Areas Aging and retirement Taxes and budgets
Tags Economic well-being Pensions Individual taxes Retirement policy
Policy Centers Income and Benefits Policy Center