Increasing regulatory / administrative burden: In the recent times, there has been an increase in the regulatory/ administrative burdens which the companies need to cater. Predictable longevity: In the recent times, there is a change in the predictable age of the people. Because of the better facilities, the predictable life of the people has increased. This has moved the companies away from the traditional pension plans. On the demand side, the factors which may be considered to be responsible for the decline in traditional pension includes the decline in the average tenure of the employee, the decrease in the overall confidence which the employee have on the plans which has been promised to them and the increase in the over short-sightedness of the plans. There are a number of key risks to anyone planning to save for the purpose of retirement. One of the major risks is life expectancy. Every person assumes that he will be living a good life but many people die earlier than what they have expected. Inflation is the other risk. The value of the dollar in the present times has been decreasing by a large rate. Also, the investment which is done for the retirement may not always guarantee a success.
Whenever there is a poor investment, it will not be yielding any return which would keep on floating in the economy. Another risk is the unexpected expenses. With the age, there are a number of medical complications which may pose a serious challenge to the life. Medical expenses can end a good amount of the retirement fund. It has been found that the rise in the cost of the health treatments has been leading to the decline of traditional pension plan. Because of the same, the people have shifted towards the health insurance and are generally away from the pension plans. Because of the rise in health cost, the employer also diminishes his willingness to sponsor a health benefit plan. Increase in the administrative burden is another key risk. Because of the increase in the administrative burdens, the companies are generally running away from the traditional pension plans. As a set of difficult rules put up by the governments on the companies, it is difficult to manage the traditional pension scheme.