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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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.