Investment policy and responsibility Let me put this more bluntly: is a shift to defined contribution schemes the optimal way to reduce pension risks for employers? I doubt it. In 401(k) plans, the individual decides what part of his wage he wishes to transfer to his 401(k) account.
Moreover, notwithstanding recent initiatives that offer participants responsible investment-packages as a default, the majority of the plans still give contributors a substantial say in the investment policy. This all means that many 401(k) plans rely heavily upon individual responsibility as well as financial literacy.