Keohane: The Pros and Cons of Defined-Benefit vs. Defined-Contribution Plans

Keohane evaluates the various merits (and shortcomings) of defined-benefit plans as compared to defined-contribution plans. He describes how paying retirees what was promised is “ingrained within the DNA” of HOOPP, but that responsible pension funds should nevertheless be prepared to curtail cost-of-living-adjustments, and even the principal payouts themselves, if they find themselves under extreme financial pressure. Keohane and Harrison finish their conversation by discussing how pensions fit into the broader retirement narrative, and how they specifically affect each generation. Keohane notes that millennials should be the most concerned with the looming retirement crisis, since they have the most to lose. Keohane concludes, “the best time to plant a tree was 25 years ago, but the next best time is today.”

RELATED CATEGORIES: Global Economy, Market Analysis

Get 2 new episodes of The Interview
sent to your inbox every WEEK - FREE

The premier finance & business interview series in the world