A pension cost is the annual cost incurred by a firm in providing its employees with a pension plan.
 These costs tend to be 50 to 100% higher than a 401k plan.
 This is because pension plans require guarantees for specific allocations of money and 401k plans are more discretionary.
 Employers are able to make changes in matching contribution percentages and also adjust any profit sharing contributions.
 Plus, administrative expenses and asset allocation change costs are being turned over to plan participants.
 The result is a built in advantage for many companies to prefer 401ks to traditional pension plans.
The high pension cost makes it difficult to justify their use.
 Although in difficult times like the present recession, many critics of 401k plans call for companies to use pension plans instead.
 Pension plans can offer a unique recruiting tool during downturns in the economy; however, they still are being slowly fazed out in most private sector companies and even in the federal sector.
      However, this shift was not made solely by the companies concern about their bottom line and profits.
 Instead, this shift was encouraged by many employees itself.
 The argument was asserted that 401k plans offer employees a better opportunity of gaining more money for their retirement than a pension plan.
 Of course, this assumes that good investment decisions are made and that there are sufficient options to allow this to occur.
 However, this greed of more money was sufficient to get many employees to urge their employers to make the shift.
 The result was a snowball effect to the present day where most companies now offer employees 401k plans.
  This rising popularity of 401ks has been dissipated by recent economic events.
 The call and need for pension plans still exists even with the high pension cost.
 However, if these plans are to continue in the future, employees will need to call for their continued use.