Chapter 5. Birth of the DTR 401(k) Plan
W. David Hand

Background

Over 30 years ago, the retirement plans of Americans were funded, administered, and managed entirely by American companies. The core plan was a defined benefit (DB) plan well designed to give the participant at retirement age a monthly pension for life. Many pension plans also granted cost-of-living increases to retiree pensions annually to keep up with inflation. Defined benefit core elements include:
1. The plan provides a monthly pension for life based on final salary.
2. The company funds this plan entirely.
3. The company bears all investment risk.
4. The plan benefits are insured by the assets in the plan.
Americans during the 1970s experienced a serious recession. Firms were laying ...

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