From
Watson Wyatt Insider:
If today’s defined contribution approach to saving for retirement
relies too heavily on workers’ doing the right things at the right
times, and being lucky besides, maybe it’s time to restructure
traditional pensions for the 21st century. To make defined benefit
plans more viable, we need to minimize the risks that are scaring off
sponsors but retain the benefits that make these plans so valuable.
This article is the second in a two-part series based on “Pension
Aspirations and Realizations: A Perspective on Yesterday, Today and
Tomorrow.”1
The first article, “Workforce Management and Retirement in a 401(k)
World,” explored the ways retirement will be different, for both
employers and employees, in a 401(k) world (see Watson Wyatt Insider, September 2007).
Watson Wyatt explored six categories of pension risk: inflation,
interest rate, investment, mortality, incentive and regulatory. With
the exception of the last, plan sponsors can minimize these risks to
acceptable levels. Regulatory risk refers to the prospect of pension
laws’ becoming so unstable or untenable that traditional pensions are
no longer feasible.
(continue reading)
Posted on Tuesday, November 6, 2007
by Brad Neese
filed under