Defined-Benefit Plans Outdual 401(k)s

February 2005
Journal of Financial Planning;Feb2005, Vol. 18 Issue 2, p19
Academic Journal
This article presents the findings of a study conducted by Watson Wyatt regarding pension plans in the U.S. as of February 2005. Traditional employer pension plans outperformed 401(k) plans during the 2000-2002 bear market. Although both types of plans lost money during the three-year bear market, 401(k) plans fared worse by an average of 3.86 percent a year compared with professionally managed pension plans. 401(k) plans outperformed pension plans during the three years preceding the bear market, but pension plans still averaged better returns during the 1990-2002 stretch: 7.42 percent for pension plans versus 6.86 percent for 401(k).


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