It is a brave new world of personal responsibility. Private-sector companies have been abandoning their commitment to defined-benefit (DS) pension schemes, in which employees receive an income based on their final salary. The cost of the promise has been too great. But the replacement of db schemes with defined-contribution (DC) plans hurts employees. Under a db scheme, it was up to the employer to fill any hole in the fund caused by a market shortfall; in a DC plan, the employee bears all the market risk.
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