Impact of Replacing a Defined Benefit Pension with a Defined Contribution Plan or a Cash Balance Plan

Robert Clark and Fred Munzenmaier

North American Actuarial Journal, 2001, vol. 5, issue 1, 32-56

Abstract: Four pension plan conversions are examined to determine the impact on retirement benefits of workers. The study was based on interviews with top management, employee surveys, and actuarial analysis of retirement benefits under the old and new pension plans. In general, workers who leave the firm prior to the age of early retirement can expect increased benefits under the new defined contribution and cash balance plans, whereas older, more senior workers can expect to accrue smaller benefits after the plan conversions. Recognizing these potential adverse effects, the employers in our studies provided various types of transition benefits to existing workers or gave employees the choice of remaining in the old defined benefit plan. Employee surveys reveal that younger workers are more supportive of the new pension plans than are older workers. These case studies also indicate that communication by managements with their employees is very important to the successful implementation of plan conversions.

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/10920277.2001.10595952 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:uaajxx:v:5:y:2001:i:1:p:32-56

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/uaaj20

DOI: 10.1080/10920277.2001.10595952

Access Statistics for this article

North American Actuarial Journal is currently edited by Kathryn Baker

More articles in North American Actuarial Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().