DC Faces Uncertain Future May 2nd 2008

Daily News Alerts - Benefits and Pensions Monitor
Friday, May 2, 2008

Defined Contribution pension plans may have already seen their best years, says Morneau Sobeco’s ‘Vision.’ Expectations by both employers and members have been inflated by the economic environment of the past 20 years, but that was the most benign period for DC plans in the 85 or so years for which good statistics on capital markets are available. However, DC participants will probably not be able to retire with as much pension in the next 10 years as they would have enjoyed over the past 10 years. The 10 years after that may be worse again. At some point, the extent of the variability in DC pensions will become an issue and employers will feel the pressure to shore up their DC plans in some fashion. The longer corrective measures are delayed, the more expensive they will be to implement.