A defense of profit sharing plans

While pension plans are frequently touted as a superior option to profit sharing plans as a vehicle for employee retirement funding, there has been a deliberate and logical shift from a focus on monthly income (i.e., pension plans) to accumulation of retirement assets (i.e., profit sharing plans). Profit sharing plans afford much greater flexibility to employers and employees with regard to portability of retirement benefits following separations of employment and job changes, a lack of reliance on long term solvency of a single employer (notably, the Pension Benefit Guaranty Corporation, or PBGC, does not negate the need for long term employer solvency for pension plans as it only guarantees a limited retirement benefit for employees), and discretionary retirement contributions by employers rather than required contributions without regard to employer profitability. The shift from a focus on monthly income to accumulation of retirement assets was necessitated in order to accommodate these changes in employer and employee preferences and needs, both to the benefit of employers and employees.