The shift from traditional pensions makes you much more responsible for saving enough for retirement.

While most public employees still have pensions, private-sector employers have largely shifted from traditional pensions — defined benefit (DB) plans — to defined contribution (DC) plans, such as 401(k)s,¹ over the last quarter century.

How does this transition from DB to DC plans affect your retirement? You may be much more responsible for your retirement than previous generations were. Look at the differences between the two types of plans.

Traditional DB plans generally

Guarantee a specified monthly benefit for life when you retire. Make the employer responsible for decisions about how much to contribute to the plan and how to invest the money. Receive federal insurance protection through the federal Pension Benefit Guaranty Corporation (PBGC) if they are private-sector plans.

DC plans generally

Don't guarantee a specific benefit amount at retirement. Instead, you receive your retirement account balance, which is based on contributions plus investment gains or minus investment losses. Transfer the responsibility and risk for retirement savings to you. Make you responsible for decisions about contribution amount and types of investments. Aren't protected by federal insurance.

Notice key concepts missing from the DC list:

• Guaranteed benefits
• Employer responsibility for investment decisions
• Federal insurance protection

That means DC plans put you in charge of retirement planning, making investment decisions, managing investment risks and making sure you have enough money saved to last your lifetime — all without PBGC protection.

1 In addition to 401(k) plans, DC plans include 403(b) plans, employee stock ownership plans and profit sharing plans.