Shifting pensions
By Philippe Gougeon
Between 1991 and 2006, defined contribution (DC) plan membership almost doubled, increasing by 93%. During the same period, defined benefit (DB) plans lost 4% of their members.
Membership fluctuations were greater in the private sector, where DB plans lost 279,000 members between 1991 and 2006 and DC plans gained 382,000. Changes were nearly nonexistent in the public sector.
About 78% of the 192,000 members lost by DB plans were the result of plan conversions, the vast majority of which benefited hybrid or mixed plans. DC plan growth came mostly from an increase in active plan membership.
Neither industrial structure changes nor factors used in a logistic regression could explain the considerable increase in DC plans. In fact, according to an Oaxaca decomposition, these factors should have stimulated DB plan growth.
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