In the postwar period a good job meant pension benefits -- mostly a defined benefit plan like the federal government's old civil service retirement system. A worker received some fixed percentage of pay at retirement depending on how many years he worked for the company, often with long vesting periods and back- loaded benefits to encourage him to stay his entire career.

In 1978, however, businesses were given a new pension option: the 401(k) plan. Known as a defined contribution plan, companies and workers put funds directly into a special account each year that the employee managed. At retirement, the worker could withdraw the funds for income or invest in an annuity.

Quite unexpectedly, 401(k) plans turned out to be wildly popular. This was due partly to changing patterns of employment, with many employees working for several companies during their working lives. The 401(k) plans are more portable, and workers like seeing a pot of money that belongs to them. Employers like them because the regulatory and paperwork requirements are much less.