Search
 

NYC DB plans more cost effective than DC plans

New York Citys defined benefit pension plans deliver the same retirement income as defined contribution 401(k)-type individual accounts,but for 40 percent less cost, according to a report by the National Institute on Retirement Security and Pension Trustee Advisors on behalf of the Office of New York City Comptroller John C....

By Paula Aven Gladych | Updated on October 20, 2011

New York City’s defined benefit pension plans deliver the same retirement income as a defined contribution 401(k)-type individual account, for 40 percent less cost, according to a report by the National Institute on Retirement Security and Pension Trustee Advisors on behalf of the Office of New York City Comptroller John C. Liu.

“A Better Bang for New York City’s Buck” found that defined benefit savings came from superior investment returns, better management of longevity risk and portfolio diversification. The report found that defined benefit plans had higher investment returns because of the pooled nature of the assets and lower fees stemming from economies of scale, but also because the assets are professionally, not individually, managed. The City plans’ enhanced investment returns save from 21 to 22 percent.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

BenefitsPRO

Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2024 ALM Global, LLC. All Rights Reserved.