taxes or of in-kind benefits aimed at improving the economic situation of the poor.” So the usual view that poverty is lower among the elderly than among the nonelderly is sensitive to the definitions used (e.g., the inclusion or exclusion of Medicare premiums).

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FIGURE 7-1-1  Poverty rates among three age groups, 1959–2010. SOURCE: U.S. Census Bureau, Current Population Survey 1960 to 2011, Annual Social and Economic Supplements.

are also responsible for maintaining minimum funding levels that reduce the risk that plan assets will fall short of promised payments. By contrast, DC plans typically have voluntary participation, and they allow employee elective contributions and choice over the investment of their retirement assets.

As discussed in Chapter 5, prior generations of American workers who had workplace coverage typically had a primary DB and may have had a supplemental DC plan. Beginning in the early 1980s, however, plan type became more sector-specific, with the majority of private-sector and federal government workers covered by a primary DC plan, while most state and local public sector workers continued to have a primary DB plan. Both types of plans are under considerable stress today. In DB plans, underfunding is widespread, partly because public pensions are generally not subject to federal minimum funding requirements. Moreover, though corporate DB plans have funding requirements, there is in fact widespread underfunding in this sector as well. In DC plans, low contribution rates (which result in inadequate retirement assets) are more prevalent in the for-profit sector’s 401(k)-type DC plans than in the not-for-profit sector’s DC-type plans.



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