By Rebecca Moore Source: Plan Sponsor Plan sponsors and others in the retirement plan industry have been showing an increased interest in new defined benefit (DB) plan designs that minimize cost volatility and/or provide risk sharing. During a recent webinar on the subject, Rachel Barnes, a member of the pension committee at the American Academy of Actuaries, noted that many corporate plan sponsors have been taking steps to transfer or eliminate their traditional DB plan obligations. While some have [...]
Source: AI-CIO.com Defined contribution (DC) retirement plans are far more susceptible to Employee Retirement Income Security Act (ERISA) lawsuits than defined benefit (DB) plans, lawyers argue in a lawsuit filed against The Wesco Distribution Inc. Retirement Savings Plan. “The potential for imprudence is much greater in defined contribution plans than in defined benefit plans,” said the lawsuit. The complaint, which alleges Wesco neglected its fiduciary duties by allowing excessive fees, said that companies with DC plans are much more [...]
Too embarrassed to ask: what’s the difference between a defined benefit pension and a defined contribution pension?
A pension is simply a tax-efficient savings vehicle, or “tax wrapper”, that allows you or your employer to invest for your long-term future. For most of us, the main goal of a pension is to provide us with money to live off in later life, usually once we’ve retired from full-time employment. The rules governing pensions can seem confusing, particularly as the government fiddles with them at almost every other budget. But at the most basic level, there are [...]