Unlike defined benefit plans, the government does not guarantee these voluntary plans. If the investment fails, the brunt of the blow falls on the employee. Also, the benefit level upon retirement is unknown. Its worth depends on the success and solvency of the underlying investment as well as the employee s ability to save over a working lifetime. Defined contribution plans were created to supplement, not replace traditional pension plans.
Women are risk adverse.
Women are frequently labeled risk adverse because on average they invest more conservatively than men. When you have less to invest and more to lose in a poor investment, you probably invest more cautiously. Women are not reticent investors. Women live an average of seven years longer than men, which compounds all of these problems. In addition, widowhood can severely jeopardize a woman's economic prospects.