Defined-benefit vs. defined-contribution retirement plans:Defined-benefit plans are known as pensions. Employees receive a set monthly amount upon retirement, guaranteed for life. The monthly benefit is based upon the participant’s wages and length of service.Defined-contribution plans are sometimes called 401(k)-style plans, for the section of the tax code that enables them. Other defined-contribution plans include 457 and 403(b) plans. In these plans, the employee saves money, often matched by the employer, and the ultimate benefit is based on how much is saved and the investment earnings with no guarantee of ongoing benefits.The private sector moved away from pensions for a variety of reasons. The shift began with the adoption of the Employee Retirement Income Security Act of 1974, which set stringent standards for private pensions to protect workers. Then the law enabling 401(k) retirement plans went into effect in 1980, enabling workers — who change jobs an average of every 5 years — to take benefits with them.Pension plans have persisted in government because the institutions are enduring, and because the workforce is older and more risk averse, less mobile and more unionized, according to the Center for Retirement Research at Boston College. Defined-benefit plans can be cost-efficient. The cost to deliver the same level of retirement income to a group of employees is 46 percent lower in a defined-benefit plan than a defined-contribution plan, according to the National Institute on Retirement Security.Most of Washington’s 13 public retirement plans are traditional pension plans, but the system also offers hybrid retirement plans to state and local government employees. In these plans, the employee sets aside money for the defined-contribution component, and the employer contributes to a pension calculated at 1 percent per year of service.