The fallout
In the past two years, 25 percent of pensions have been shut to new employees, and by 2009, roughly four out of 10 of these traditional plans will be closed to recent hires. Meanwhile, 27 percent of employers will freeze pension benefits by 2009 for employees currently enrolled in a traditional plan. Twelve percent will cut the level of pension benefits they give employees.

That doesn't mean employees are completely adrift. That's because defined contribution plans -- a fancy term for retirement plans such as the 401(k) -- are replacing old-style pensions. In fact, 95 percent of employers offer a 401(k), according to the Profit Sharing/401(k) Council of America.

401(k) plans step in
Most employees have embraced 401(k) plans. Millions of workers contribute to a 401(k), and assets in plans now hover around $500 billion. The bulk of that money comes from workers' salaries. In fact, company contributions to 401(k) plans are typically limited to a formula under which employers chip in 50 cents for every dollar saved, up to 6 percent of a worker's salary. As employers make the shift to 401(k)s, they're stepping up efforts to get workers on board to save for retirement.

The majority intend to automatically enroll their employees into 401(k) plans, while 54 percent do or will provide investment advice so wage earners can better manage their 401(k) accounts, Hewitt Associates reports.