Only 20 percent of workers in firms with fewer than 100 employees have pension coverage, as opposed to 62 percent of workers in firms with 100 or more employees. Defined Benefit Plan Advantages - Workers Defined benefit plans have many advantages for workers and for employers. They provide predictable, secure, lifetime benefits for the worker and often for the worker's spouse. Benefits are not subject to the ups and downs of the stock and bond markets. Benefits at retirement are not dependent on the amount a worker contributes to the plan.
Older workers approaching retirement can earn a meaningful retirement benefit.
The retiree's surviving spouse is also entitled to a monthly benefit for life unless both have elected otherwise. Many small business owners are baby boomers not far from retirement age. Often their businesses have only recently matured enough to be able to support a pension plan. If the owner and his or her workers have not been covered by an adequate retirement plan, it may now be too late to build meaningful retirement savings through a defined contribution plan. An important first step in expanding the number of defined benefit plans is to enact legislation creating a simplified defined benefit plan for small businesses.