A report from the Boston College Center for Retirement Research shows that the returns investors earn in 401(k)s are at least one percentage point lower each year than the returns they would earn in a defined benefit pension plan.

The report is based on the analysis of 5,000 companies that offered both defined contribution and defined benefit plans between 1988 and 2004. During that period, the defined benefit plans returned an average 10.7% a year, compared to 9.7% in 401(k)s and a mere 3.8% in IRAs.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.