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Yes, that's how 401(k)s work and why most employers have switched to them.
by philwelch 7y ago
Yes, that's how 401(k)s work and why most employers have switched to them.
- Retric 7y agoI am specifically referring to pensions. It’s true that 401(k)s also have this feature, however many employees prefer the defined benefit a pension provides over managing their own returns and the temptations associated with managing money. The core issue is really poor US regulation over any specific issue with pensions. PS: The swap to 401k’s in the US is mostly about cost savings. Companies can simply reduce their contributions without much if any backlash. Meanwhile, third parties profit from managing 401k’s and therefore market them heavily.