Rethinking the future for defined benefit plans

According to conventional thinking, the future for defined benefit (DB) plans is that of gradual decline as plan sponsors reject the associated costs and risks. Under this thinking, sponsors are expected to continue favoring defined contribution (DC) plans as the premier employee retirement plan benefit. However, IBM’s surprising decision to reopen its cash balance plan in 2023 might suggest a different direction for the retirement industry.


There are several valid reasons behind the trend of DB plan decline in America, but recent events and developments could challenge that. In light of these changes, plan sponsors may wish to explore the ways that DB plans can be used effectively.


This paper discusses:


  • IBM’s 2023 plan reopening
  • The old paradigm
  • Reasons to consider using DB plans in the future.
  • Turning a trapped surplus into a tapped surplus
  • Potential implications of a DB revival


Read our full paper

Some plan sponsors might begin to weigh the risks of managing a pension against the cost of a plethora of defined contribution plan add-on options. From an employer perspective, attracting and retaining top talent is a current priority. This may persist well into the future as the work environment remains variable and employee behavior continually shifts.1 In the evolving employee benefits universe, providing a DB plan to employees could be a differentiating and cost-effective talent acquisition and retention solution. Read our report for more information.

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1The transforming workplace: Insights to help companies evolve with the needs of today’s workforce, 2023 Workplace Benefits Report, Bank of America Corporation, 2023.