Daily Commentary: On defined contribution pension plans

David Merkel at Aleph Blog has a good post on defined contribution benefit plans. As you probably know, in many developed economies, employers hate defined benefit plans because they have proved expensive for employers and they have shifted the risk burden for savings over to individuals. This is an important source of savings as birth rates go down and fewer children are available (or even in close physical proximity) for their parents in old age. It helps to fund all manner of health care and other costs that seniors have to content with.

It seems defined benefit plans are dead. David tries to develop an alternative to defined contribution that is a swag between the two. For my part, I think this issue of the great risk shift will become increasingly problematic. People do want contr...


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