Are defined-benefit pension plans in decline?

Until the late 1970s more American workers participated in defined-benefit pension plans than in other types of retirement plans. But the numbers have long been in decline. By 1987, defined benefit plans represented 28% of all retirement plans, a drop from 32% in 1975, according to Employment Benefit Research Institute (EBRI) data.

What is a defined-benefit pension plan?

Defined-benefit pension plans are still somewhat common in the public sector, especially for those who work in government. Unlike a defined-benefit plan, where employees know exactly what their benefits will be in retirement, the only certainty in a defined-contribution plan is the amount that the employee contributes.

When can a pension plan be amended?

Governmental and collectively bargained plans may be amended as late as the last day of the plan year beginning on or after January 1, 2027. If you have any questions about SECURE 2.0 and defined benefit pension plans, please contact one of the attorneys in the Employee Benefits and Executive Compensation Practice Group at Bradley.