Employers remain concerned about DB plans

Sears Canada the latest to make the switch from DB to DC
By Uyen Vu
|Canadian HR Reporter|Last Updated: 02/22/2007

Defined benefit (DB) plans were better funded last year than in previous years, but plan sponsors are still concerned about the risks entailed in these plans and are mulling over alternatives to them.

The latest employer to opt for the alternative is Sears Canada, which announced last month that its DB pension plan will be replaced by a defined contribution (DC) plan as of July 1, 2008.

In a Mercer Human Resource Consulting survey of 300 financial executives around the world, half reported that their DB plans represent at least a moderate financial risk and 60 per cent have either closed DB plans to new hires, frozen or reduced DB benefits or intend to do so.