There is a shift occurring in the structure of employer sponsored retirement plans in the United States, which could have a significant impact on a retiree's financial stability and well-being. Employer-sponsored retirement plans are being restructured in response to new legislation that makes it more expensive to administer defined benefit plans and increases the financial exposure for employers who decide to continue offering them. Employees in the non-profit sector, where wages have historically been lower than in the for-profit sector, could be especially vulnerable.

In general, employers are moving away from defined-benefit retirement plans, plans that are completely funded and managed by the employer and guarantee the employee a certain level of income during his/her retirement years; to defined contribution retirement plans, plans that may be partially or fully funded by employers and employees, but where the individual employee assumes all the responsibility (and risk) for management of his/her portfolio. With defined contribution plans, the amount of retirement income available to the employee is completely dependent on how successful each employee's investment strategies are.

The purpose of this study was to find out how well employees at a non-profit agency located in the City of Los Angeles understood the responsibilities of managing their individual retirement plan investments, to what extent they were utilizing the written financial reports to not only track their investments, but to make well informed and timely changes in investment strategies.

The research design was based on a case study format, with qualitative and quantitative components. A total of 154 out of an eligible 221 employees at the agency participated in the study. The data collection instruments were written surveys for the employees and face-to-face interviews with the agency's senior management staff.

The findings of the research indicate that the senior management staff at Agency ABD are responsive to the retirement concerns of employees and are proactive in their efforts to improve agency retirement plan benefits. However, the findings also indicate that a majority of the employees do not understand plan operations and are not managing their retirement plans in a manner that will maximize their investments. A number of the agency employees expressed concern at not having the level of funds that they will need to live on during retirement, but at the same time most have opted for the most conservative investments available, have made few or no changes to their investment strategies (during their participation in the plan) nor sought out financial expertise and guidance.