The Global Outlook for Defined Contribution Versus Defined Benefit Pension Plans

Dent, Kevin; Sloss, David
March 1996
Benefits Quarterly;1996 First Quarter, Vol. 12 Issue 1, p23
Academic Journal
This article discusses the different plan characteristics of defined benefit and defined contribution pension plans, compares their major features and discusses their use in different countries. Cross-national trends are analyzed, with discussion of outlook for both types of pension plans. The authors discuss in detail the advantages and disadvantages of both plan types, as well as the prevalence of each being established as new pension plans across countries. They further discuss the reasons for the trend toward defined contribution plans and the difficulty of converting existing plans from defined benefit to defined contribution pension plans. Finally, the article explains future trends and developments, including the increase in alternative benefit structures such as cash balance and hybrid plans.


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