From the Field
The importance of defined benefit plan design
Defined benefit plans don’t all impact glide paths the same way.
2024-05-16 09:15
Justin Harvey, ASA, CFA, Head of Analysis, Multi‑Asset Solutions
Adam Langer, CFA, Senior Quantitative Investment Analyst
Key Insights
  • It is an oversimplification to assume all defined benefit (DB) plans impact glide path design for an accompanying defined contribution (DC) plan the same way.
  • Accrual formulas and forms of payment within a DB plan are the features that seem to have the greatest potential impact on an accompanying DC glide path.
  • Using scenario analysis, we evaluated several common DB plan designs to show how each one affected the equity level and slope of a hypothetical glide path.

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