The defined benefit world is “still a very powerful leg in the retirement planning stool,” Tom Reeder, director of the Pension Benefit Guaranty Corp., said Tuesday, with more plans existing today than last year.
“People think DB plans are so yesterday,” Reeder told attendees at the American Society of Pension Professionals and Actuaries annual conference in National Harbor, Md., just outside Washington. “I want to take a bit of an issue with that; we cover 76 million people in the U.S. under DB plans, that’s 40 million in the private sector and 30 million in the public sector,” Reeder said. “It’s going to be awhile before DB plans become irrelevant.”
ASPPA is part of the American Retirement Association.
As it stands now, there are 18,000 small DB plans, and 211 jumbo plans — plans with more than 25,000 participants, Reeder said.
“Small plans are in a growth sector,” he said, adding that there are more DB plans today than last year. “I’m not saying we have more participants, but we do have more plans.”
While there’s been a “decline in participation,” DB plans “are still vital and still something that employers use to attract and retain quality workforces,” Reeder said.
DB plans “will continue to grow,” he continued, but “I do think there will be changes,” with plans “not being dependent on investment choices, annuity prices and will not run out if someone lives a long time.”