- April 2012: Vol. 24 No. 4

To read this full article you need to be subscribed to Institutional Real Estate Americas

The Cow You’ve Been Milking: The Defined Benefit Pension Fund Market Is Drying Up

by Geoffrey Dohrmann

For more than 10 years now, this column has been warning (and I’ve been warning from the podium at our conferences and elsewhere) about the impending shift from defined benefit–based pension funding schemes to defined contribution plan–type schemes here in the United States and elsewhere.

During that time, more than 70 percent of U.S. corporate pension plan sponsors have frozen new participants out of their defined benefit plans, leaving these workers with no options for accumulating retirement savings other than their own personal savings, individual retirement accounts (IRAs), Simplified Employee Savings accounts (SEPs) and their employer’s defined contribution plans.

Tom Mackell, my long-time friend and former chair of the Richmond Federal Reserve, calls this the “YOYO” shift (as in, the shift to “your on your own”).

From my seat, this has dramatic public policy implications for a variety of reasons.

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy