If your plan is a defined benefit plan, you don't have to worry about it. Your monthly benefit is guaranteed, and your employer is responsible for putting enough money away to pay your benefit when you retire. (If the money the employer put away does better than was anticipated, the employer sometimes can reap the benefits in terms of lower contributions in future years.) The Federal Pension Guaranty Corporation stands behind many plans to protect employees and retirees.

If your plan is a "defined contribution" plan, you do need to worry about investment return, but there is no simple answer. Some plans allow you to allocate the money in the plan among a choice of investment options. They range from:

(1) "Fixed Income Accounts" that pay a guaranteed rate

(2) Different classes of mutual funds or similar investment vehicles, that may range from aggressive growth and international funds (with higher than average risk – and hoped for higher than average returns) to

(3) Common stock index funds, that should track the leading stock market averages.

The best thing to do is to ask an investment professional to analyze your options, the allocation choices you made, and the plan's performance. If the choices offered suggest that the employer may be acting in its own interests, rather than in the interests of the plan participants, it may be time to consult with an attorney.

(Reviewed 9-08)