The typical member of a defined benefit pension plan has been getting better investment returns than the typical member of a defined contribution retirement plan.[@@]
Analysts at Watson Wyatt & Company, Washington, have published data supporting that conclusion in a paper in an in-house newsletter.
The analysts used Internal Revenue Service tax return data to compare overall returns at defined benefit plans and defined contribution plans. Analysts also broke results down by plan size.
Between 1992 and 2002, the median annual return at defined benefit plans was 7.42%, compared with a median annual return of 6.86% at defined contribution plans. Over the course of a 30-year career, that could give defined benefit plan members a 16% higher return.