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Mercer Sees Defined Contribution Plans as Competitive Tool

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Mercer Consulting weighed in on the debate over the value of defined benefit (DB) plans versus defined contribution (DC) plans in the cover story of Mercer’s first 2010 issue of Global Retirement, Risk & Finance Perspective newsletter. The story in Perspective centered on using DC plans as a valuable business tool to retain employees.

Using the survey it conducted and published in 2009 on Global Defined Contribution, Mercer found that respondents’ top reasons for using DC plans were to remain competitive in the market, to encourage employee responsibility for retirement savings, and to provide employees with adequate benefits for retirement.

The survey covered a wide range of topics related to DC trends in 33 countries across continental Europe, Asia Pacific, Latin America, the U.S. and the U.K. The survey had more than 1,500 responses, including more than 300 from multinationals.

Craig Burnett, Mercer’s Europe DC consulting leader based in Paris, said that the survey provided clear steps on how to use DC plans as a business tool to measure the real business value of their plans, but he added that “If a DC plan is seen as a business tool then it should be measured as one.” “Otherwise,” wrote Burnett, “how does a leader know that the plan is more worthy” than any other plan.

To read the complete story in Perspective, please click here.


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