Paul Schott Stevens, president and CEO of the mutual fund association, Investment Company Institute (ICI), talks with us about retirement savings and how to plan for the future. Stevens points to new data by ICI that supports the “defined contribution” approach as in 401 (k) plans. He shares recent data from the Investment Company Institute that supports the “defined contribution” model of a 401 (k) and how retirement savers were able to survive the 2008 bear market. According to Stevens, there are concrete steps to be taken that can improve America’s retirement system and how we plan for the future.
However, union supporters and labor experts say state pension recipients rely on defined benefits that have been promised after years of service. While reform is necessary, changing pension terms pose a definite challenge.
States such as California and Illinois are facing the ballooning costs of public pension plans and are in need of reform in order to control state spending. Stevens points out that states such as Georgia, Oregon, Rhode Island and Washington now offer employees the choice of participating in either a defined contribution or a defined benefit plan.
View graphics of Stevens' research below.