[Speed Gibson,
Monday December 20, 2004 at 2:31pm]
Defined Contribution vs Defined Benefit
In my so far futile search for a better term than "privitization" of Social Security, the best I have so far is to parallel the steady transition from pensions to 401K programs.
Company pensions are generally termed a "defined benefit" meaning your service is somehow evaluated to determine the amount paid you for some fixed term or life. The 401K alternative is a "defined contribution" program, meaning that some amount is contributed to you now instead of a promised pension later.
The term "401K" is widely understood - and liked. Maybe a similar name like "402K" or "501K" or "42U" (4 percent to you) could be coined, and repeated often to get people saying and thinking along 401K lines.
Company pensions are generally termed a "defined benefit" meaning your service is somehow evaluated to determine the amount paid you for some fixed term or life. The 401K alternative is a "defined contribution" program, meaning that some amount is contributed to you now instead of a promised pension later.
The term "401K" is widely understood - and liked. Maybe a similar name like "402K" or "501K" or "42U" (4 percent to you) could be coined, and repeated often to get people saying and thinking along 401K lines.