‘Sweet spot’ between DB, DC pensions

Shared risk between plan sponsor, members may make target benefit a wise alternative
By Liz Bernier
|Canadian HR Reporter|Last Updated: 01/28/2014

Pension plan sustainability has been a growing concern for years, but there hasn’t been much of a consensus on a solution. Calls for Canada Pension Plan (CPP) enhancements have gone unanswered by the federal government and those employers that do offer pension plans are migrating en masse from defined benefit (DB) plans to defined contribution (DC).

So what’s to be done? One potential option may be target benefit (TB) plans, which many experts say are a “middle ground” between DB and DC.

How do they work?