The advocate of public pension plan reform did, however, point to bad outcomes for public employees in selected states that substituted 401(k)-style retirement packages for traditional defined benefit plans.
In fact, the law's stiffer funding requirements for defined-benefit plans will likely push companies with underfunded plans to freeze them, says Jack VanDerhei, a Temple University professor and fellow at the Employee Benefit Research Institute.
Activists investors like Loeb are still criticized in the U.S. A few weeks ago, for example, Loeb was knocked for allegedly supporting an effort to deny teachers and other public-sector workers guaranteed benefits while raising money from such defined benefit plans for his hedge funds.
In 1991 West Virginia lawmakers ended their defined-benefit plans for new teachers.
FORBES: Why Defined-Benefit Plans Are Safer Investments for State Governments and Workers
In addition, higher contributions for Medicare and Social Security are expected while 401(k)s and other self-funded retirement plans continue to replace employer-funded defined benefit plans, particularly for state and local government workers.
Another beneficial effect is that American employers with defined-benefit pension plans for employees have been able to reduce their contributions into pension funds as the rise in share prices has swollen the value of funds' assets.
Still, the arcane computations in defined benefit pension plans make it hard for most employees to predict how much they will suffer in a freeze.
Workers and pensioners in the steel and airline industries, who account for fewer than 5% of participants in defined-benefit plans, have benefited from 70% of the agency's claims since 1974.
It seems clear, though, that Americans have won more responsibility for their retirement portfolios as firms switch from defined-benefit pension plans to defined-contribution plans.
"These plans are concerned about their ability to invest with your firm going forward, " Ms. Weingarten wrote, given Mr. Loeb's support for StudentsFirst and its "outspoken attacks" on defined-benefit pension plans.
Unlike defined benefit plans, where corporate sponsors are ultimately responsible for ensuring that retirement obligations to employees are met, defined contribution sponsors who fail to diligently manage plans heretofore have escaped liability.
The existing legal framework is, and has for decades been, failing participants in retirement plans of all stripes (defined benefit, as well as defined contribution).
FORBES: IBM 401(k) Participants Need Their Own "Shadow" Fiduciary to Guard Retirement Benefits
See also: How Entrepreneurs Can Get Big Tax Breaks For Retirement Savings for details on SEP-IRAs, individual 401(k)s and defined benefit plans.
Saving for retirement is not as easy as it used to be in the days of defined benefit plans.
The high cost of pensions and health care for retirees has long been a burden for American automakers, which have tried to rein in costs by freezing their traditional defined benefit plans and steering workers toward new 401(k) retirement savings programs.
FORBES: Ford's Leaky Pension Boat Is A Multi-Billion Dollar Problem
Employees are instead absorbing higher costs for insurance premiums and co-pays, and there is nearly a complete elimination of defined benefit plans.
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But ever since disgruntled IBM employees brought the issue to public attention, the movement by major corporations to convert traditional defined-benefit plans to so-called cash-balance pension plans has been a lightning rod for workers'--and particularly baby boomers'--growing anxiety over their retirement incomes.
More directly, we know premium support payments already work well within Medicare Part D, the prescription drug benefit, currently delivered via private plans that submit bids, while the government provides a defined contribution for Medicare beneficiaries.
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