Underfunded pensions are primary a problem with defined-contribution pension plans.

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Underfunded pensions are primarily a problem with defined-benefit pension plans, not defined-contribution plans. In defined-benefit plans, the employer is responsible for providing a specific retirement benefit to employees, which can be costly if the plan becomes underfunded. In defined-contribution plans, the employee is responsible for saving and investing for their own retirement, so underfunding is less of an issue for the employer.

Underfunded Pensions Are Primary a Problem with Defined-Contribution Pension Plans