- January 1, 2022: Vol. 15, Number 1

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It’s a brave new (but still very wacky) world: Pay close attention to what’s happening at the margins

by Geoffrey Dohrmann

For more than 20 years now, we’ve been warning the investment management and consulting communities that the defined benefit (DB) pension cow they’ve been milking has been getting skinnier and skinnier.

The widespread global adoption of defined contribution (DC) plans and the attendant freezing and/or termination of DB plans has been a gradual, ongoing process — like a frog who finds himself slowly boiling in water, it may not feel very threatening until it’s too late. To cite some statistics, according to the U.S. Department of Labor, in 1975 103,346 DB pension plans were being offered to employees of public and private U.S. organizations, along with 207,748 DC plans. However, DB plans controlled nearly $186 billion in total assets, while DC plans controlled some $75 billion, less than 29 percent of pension fund assets.

Over the next 45 years, however, the number of DB plans shrank considerably, and contribution growth in DC far outstripped that of DB. By 2018

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