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The Transformation of the American Pension System: Was it Beneficial for Workers?
Edward N. Wolff
First Chapter | Table of Conents
333 pp. 2011
$40.00 cloth 9780880993807
$20.00 paper 9780880993791
The share of Americans with defined contribution pension plans now exceeds the share of those with defined benefit plans. Wolff refers to this as the "great transformation" and it leads him to examine recent evidence to see whether there are winners and losers resulting from this switch away from traditional pension plans.
"At last, in one place, all the data one would want on the impact on households of the dramatic shift from defined benefit plans to 401(k)s. This encyclopedic effort is based on the Federal Reserve's Survey of Consumer Finances between 1983 and 2007, with projections to 2009. The main finding is that 401(k)s looked good relative to defined benefit plans during the long bull market of the 1980s and 1990s, but that edge evaporated in the 2000s. Wealth in 401(k) plans is also more unequally distributed than that in defined benefit plans, and many households will be at risk in retirement. If you want the numbers, read this book."
–Alicia H. Munnell, Director, Center for Retirement Research at Boston College, and Peter F. Drucker Professor in Management Sciences, Boston College, Carroll School of Management
"Can Americans expect economic security in their old age? Ed Wolff's new book The Transformation of the American Pension System documents authoritatively how radically the American pension system changed between 1983 and 2007, as defined contribution and 401(k) plans elbowed aside traditional defined benefit pensions. Wolff's careful analysis illuminates the holes in the new system and how important Social Security wealth was to retirement income adequacy, even when the stock market and housing prices were booming. Now that those days are gone, his policy recommendations are even more important."
–Lars Osberg, University Research Professor and McCulloch Professor of Economics, Dalhousie University