Effects of Pensions on Household Wealth Accumulation: Implications of the Shift Toward Defined Contribution Plans

Pension wealth constitutes a sizable portion of households' retirement
resources. Close to half of civilian nonagricultural workers participate in
pension plans.' Future income flows from private pensions accounted for
20 percent of the wealth of households aged 65-69 in 1991 (Poterba,
Venti, and Wise 1994, table 1). Thus the relation between pensions and
other household wealth can have important implications for policy issues, such as how to raise the saving rate or assure adequate saving for
retirement, as well as for more fundamental issues, such as how people
make economic decisions about the future.