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Large Declines in Defined Benefit Plans Are Not Inevitable: The Experience
of Canada, Ireland, the United Kingdom, and the United States

John A. Turner and Gerard Hughes

This report evaluates the causes of the decline in defined benefit plans and the
move toward defined contribution plans. It analyzes the large changes in the
United Kingdom and the United States, and the smaller changes in Canada and
Ireland. It investigates the hypothesis that the costs of providing defined benefit
plans have increased relative to the costs of providing defined contribution plans.
It focuses on the regulatory environment, including changes in accounting rules.
It also considers the increase in worker longevity at older ages. A factor not
considered in previous studies is the level of fees charged by mutual funds, and
how that differs across countries and over time. It also considers changes in the
demand for the two types of plans. Differences in the decline across countries,
across plan size, across industries, and across time are used to shed light on
causes of the decline in defined benefit plans.