Best Of Both Worlds? Combined Pension/401k Plan

DAVID PITT

DES MOINES, Iowa (AP) — Over the last year it's become abundantly clear that the stock market can devastate even seemingly healthy retirement accounts. Even so, with the guaranteed income of traditional pensions disappearing, most investors have little choice.

The vulnerabilities of the 401(k) plan have cast doubt on whether a voluntary savings plan is the best way for workers to prepare for retirement. There are some possible alternatives coming, however, that might just catch on. One that may become available in January offers a guaranteed pension-like retirement benefit alongside a 401(k).

It's called the DB(k) and it was created in the tax code in 2006. The law allows companies with fewer than 500 workers to start the hybrid plan after Jan. 1, 2010, and some proponents would like to see it available to all workers. As it is now, barely 40 percent of all workers even participate in a retirement plan at work.

Here are some questions and answers that explain details of the DB(k):

Q: What are the basic features of the DB(k)?