July 26, 2012
from defined benefit (DB) pension plans significantly contributes to the
well-being of older Americans. ---
According to a report from the National Institute on
Retirement Security (NIRS), rates of poverty among older households (ages
60-plus) lacking defined benefit (DB) pension income were approximately nine
times greater than the rates among older households with DB pension income in
2010, six times greater than in 2006.
Older households with lifetime pension income are far less
likely to experience food, shelter and health care hardship, and are less
reliant on public assistance, according to the report titled “The Pension
Factor 2012: Assessing the Role of Defined Benefit Plans in Reducing Elder
Economic Hardships.” The data also indicated that pensions are a factor in
preventing middle-class Americans from slipping into poverty during retirement.
“[Pension income keeps] middle-class families in the middle
class when they retire,” said Diane Oakley, executive director at NIRS and
co-author of the report, during a webinar about the data.
In addition, older households with DB income generally fared
better during the recent economic turmoil than households without it. “The
power of the DB plan actually became even stronger in the financial crisis,”
The report estimates that in 2010, DB pension receipt among
older American households was associated with:
million fewer poor and near-poor households;
fewer households that experienced a food insecurity hardship;
fewer households that experienced a shelter hardship;
fewer households that experienced a health care hardship; and
million fewer households receiving means-tested public assistance.