The Potential Effects of Cash Balance Plans on the Distribution of Pension Wealth at Midlife

TitleThe Potential Effects of Cash Balance Plans on the Distribution of Pension Wealth at Midlife
Publication TypeReport
Year of Publication2001
AuthorsJohnson, RW, Uccello, CE
Series TitleThe Urban Institute Research Report
InstitutionThe Urban Institute
CityWashington, D.C.
KeywordsNet Worth and Assets, Pensions
Abstract

Recent pension plan conversions by numerous large employers have sparked debate about the merits of cash balance plans. This paper compares pension wealth in traditional defined benefit (DB) plans and cash balance plans for a national sample of covered Americans ages 51 to 61. The simulations indicate that replacing DB plans with cash balance plans would redistribute pension wealth from those who held long-term jobs for many years to those with multiple short-term jobs. Women at midlife in 1992 with DB coverage would have lost wealth in cash balance plans, but future cohorts of women are likely to fare better.

URLhttps://www.urban.org/research/publication/potential-effects-cash-balance-distribution-pension-wealth-midlife
Endnote Keywords

Pension Wealth/Pension Plans/Distribution

Endnote ID

8484

Citation Key5459