The problem with DB plans is that the Company must earn enough to fund any losses that occur over time. With baby boomers slowly dropping out of the active market place returns on stock investments will dwindle thus potentially making pension deficits structural with no way out for the Company except insolvency. That is the real risk IMHO.
I am on DC - I likely would have received alot more on DB and I actually had the choice ... but at least I know what I have to work with...
exactly. i think all DB plans should be done away with. it only adds cost to those businesses that offer them and results in increased cost of the products/services they provide...in fact so too does a DC plan so in some respects....so i guess i am of the view that you should be on your own and save on your own for your own retirement instead of expecting another to add to your plan at the cost to me the consumer.
DB is a corporate risk for the life span of every employee covered which could be up to 35 years after they retire. That is a risk no corporate economist could plan for properly.
