Switching from DB to DC

June 11, 2015

In a WSJ article from April 2, 2015 Hank Kim (Executive Director – National Conference on Public Employee Retirement Systems, Washington) highlights the potential long-term costs of switching from a defined-benefit (DB) to a defined-contribution (DC) plan. Due to a host of reasons – with the most prominent one being higher fees – such plans can “provide 20-30% lower benefits”. Since this reality would be recognized at retirement, there would be no time to make additional savings; pensioners, the economy and future taxpayers would have to pay the bill.

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