Defined Benefit Archives - Page 3 of 11 - Pension Policy International

18JunJune 18, 2024

UK. DC contributions exceed DB pensions for the first time

A report published today by Barnett Waddingham (BW), the leading professional services consultancy shows that for the first time, contributions paid by the FTSE 350 defined benefit (DB) scheme sponsors into defined contribution (DC) schemes exceeded those paid into DB schemes. BW conducted an analysis of the FTSE 350 companies with DB pension schemes over the last twelve months to 31 May 2024. The data reveals that contributions totalling £8.1 billion were paid into DB schemes (consisting of £4.7bn of...

June 18, 2024

NewsDefined Benefit, Defined Contribution, savings, UK

10JunJune 10, 2024

US pension plans are disappearing but there are alternatives

Over the past few decades, a significant shift has occurred in the landscape of retirement planning in the United States. The traditional “defined benefit” retirement plans, commonly known as pension plans, have become increasingly rare. These plans provided retirees with a guaranteed benefit, typically in the form of a fixed monthly or yearly payment. In their place, “defined contribution” plans, such as 401(k) plans, have become the norm. These plans focus on specified contributions, with the eventual retirement benefits depending largely on the performance of the investments made with those contributions. The current state...

June 10, 2024

NewsDefined Benefit, Defined Contribution, US

06JunJune 6, 2024

Beware of DB pension risk blind spots – What gets measured gets managed

It is often said that “What gets measured gets managed” and it is simple to find many examples, inside and outside of the pensions arena, where this adage applies. However, in some contexts, especially when measuring uncertain financial liabilities and risks, it is not merely “what” is measured that matters but also “how” it is measured that is important. Applying different principles to measurement can significantly influence the actions taken with the potential for material financial ramifications. One common measurement of...

June 6, 2024

NewsDefined Benefit, Pension Management, Risk

05JunJune 5, 2024

US. Now It Is About Protecting Healthy Funded Levels

Corporate defined benefit pension plan sponsors have a singular opportunity to evaluate if their plans are in a position to offload liabilities using pension risk transfer or allocate to strategies with less risk, including liability-driven investing, reviewing their options to best provide pension benefits to the participants to whom they were promised at the lowest cost for the company going forward. Separate Milliman and Principal Asset Management research on pension plan funding finds sponsors have room to now accelerate de-risking—as...

June 5, 2024

NewsDefined Benefit, Funding, Risk, US

31MayMay 31, 2024

Intergenerational risk sharing in pay-as-you-go pension schemes

By Helene Morsomme, Jennifer Alonso García & Pierre Devolder Population ageing undermines traditional social security pension systems that combine pay-as-you-go (PAYG) and defined benefits (DB). Indeed, demographic risk, if guaranteed benefits remain unaltered, will be borne entirely by workers through increases in the contribution rate. To avoid a substantial increase of the contributions and in order to maintain simultaneously the financial sustainability and the social adequacy of the public pension system, risk sharing and automatic balancing mechanisms need to be...

May 31, 2024

Articles, Pension design2024, Aging, Defined Benefit, Pension design

17MayMay 17, 2024

The Incidence of Workplace Pensions: Evidence from the Uk’s Automatic Enrollment Mandate

By Rachel Scarfe, Daniel Schaefer & Tomasz Sulka We examine who bears the costs of mandated workplace pension programs, exploiting the quasi-experimental rollout of automatic enrollment in the UK. Total compensation (take-home pay plus employer contributions) increases, driven by employer contributions, while the amount of take-home pay decreases. These effects differ by employer size, with take-home pay declining to an extent in the largest firms that we can rule out a pass-through to employees of more than 47%, significantly less...

May 17, 2024

Articles, Pension design2024, Defined Benefit, Enrolment, Occupational Pensions, savings, UK

13MayMay 13, 2024

US. The Myth That Public Workers Don’t Care About Pensions

Although some may argue that pensions are no longer a relevant tool for recruiting and retaining public workers, the historical data and broader research show otherwise. However, with financial literacy being a significant challenge in the United States, it is critical that employers provide the necessary education around these benefits to maximize their potential in the battle to attract and keep talent. As pensions have become less common in the private sector, they have increasingly become a highly coveted benefit for current...

May 13, 2024

NewsDefined Benefit, Labor Market, Public Pensions, US

10MayMay 10, 2024

Policy Ideas for Boosting Defined Benefit Pensions In The Private Sector

By Dan Doonan, John Lowell, Jonathan Price, Michael Kreps, Tyler Bond & Zorast Wadia In response to a request for information issued by the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, the National Institute on Retirement Security has submitted a research issue brief with policy ideas to help expand defined benefit (DB) pension coverage for private-sector employees. The research brief, Policy Ideas for Boosting Defined Benefit Pensions In The Private Sector, details six options for Congress to consider to...

May 10, 2024

Books, Books, Pension design, Reports2024, Defined Benefit, Public Pensions, US

10MayMay 10, 2024

Intergenerational redistribution in a pay-as-you-go pension system

By Jacob Lundberg This study provides a comprehensive analysis of the generational wealth transfer within Sweden’s public pay-as-you-go pension system introduced in 1960. Using extensive administrative registers, the paper quantifies the contributions made and benefits received by each birth cohort. The findings reveal a substantial fiscal imbalance favouring the initial generation (born in the early 20th century), who received a net gain of $1.5 trillion in today’s present value, equivalent to up to 13% of their discounted lifetime income. This...

May 10, 2024

Articles, Pension design2024, Defined Benefit, Social Security, Sweden

07MayMay 7, 2024

UK. DB and DC Participant Access Update

Private industry workers have a roughly 67% chance of having access to a defined contribution retirement plan and a 15% chance of being offered a defined benefit option, according to the most recent estimates from the U.S. Bureau of Labor Statistics. Of those workers with DB access, 11% are taking advantage of the benefit, according to the government department. In the DC space, 49% of workers are reportedly saving into the plans. The data, which was released April 19, is drawn from...

May 7, 2024

NewsCoverage, Defined Benefit, Defined Contribution, UK

June 2024

May 2024