Trends in Pension Benefit Formulas and Retirement Provisions
Changes in pension plan retirement formulas and benefit provisions over the last decade are examined, drawing on data collected and tabulated by the U.S. Department of Labor's Employee Benefits Survey of medium and large firms. The evidence shows that pension provisions have changed a great deal over the last decade, among both defined benefit and defined contribution plans. In the defined benefit environment, participation and vesting rules changed substantially; early retirement became more accessible and benefits somewhat more generous; normal retirement ages declined; and pension benefits were increasingly likely to depend on final rather than career earnings. Benefit integration with social security also grew to almost two-thirds of all participants in defined benefit plans. Overall, though pension replacement rates rose slightly over time, benefit ceilings remained pervasive for work at older ages and disability benefit provisions became more stringent. Defined contribution pension plans also changed a great deal over the decade of the 1980s. Workers were increasingly likely to be covered by combinations of defined benefit and defined contribution plans, with the latter usually a savings and thrift plan permitting a lump sum distribution. Profit sharing and stock plans appear to have stagnated during the latter part of the 1980s.
|Date of creation:||Jun 1991|
|Date of revision:|
|Publication status:||published as Mitchell, Olivia S. "Trends in Pension Benefit Formulas and Retirement Provisions." In Trends in Pensions 1992, edited by J. Turner and D. Beller. U.S. Dept. of Labor, 1992|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Alan L. Gustman & Olivia S. Mitchell, 1990. "Pensions and the U.S. Labor Market," NBER Working Papers 3331, National Bureau of Economic Research, Inc.
- Steven G. Allen & Robert L. Clark & Daniel A. Sumner, 1984.
"Post-Retirement Adjustments of Pension Benefits,"
NBER Working Papers
1364, National Bureau of Economic Research, Inc.
- Zvi Bodie & John B. Shoven & David A. Wise, 1987. "Issues in Pension Economics," NBER Books, National Bureau of Economic Research, Inc, number bodi87-1, 08.
- Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, March.
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"The Incentive Effects of Private Pension Plans,"
NBER Working Papers
1510, National Bureau of Economic Research, Inc.
- Olivia S. Mitchell & Rebecca A. Luzadis, 1988. "Changes in Pension Incentives through Time," ILR Review, Cornell University, ILR School, vol. 42(1), pages 100-108, October.
- Joseph F. Quinn & Richard V. Burkhauser & Daniel A. Myers, 1990. "Passing the Torch: The Influence of Economic Incentives on Work and Retirement," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number pt, November.
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