Description: The decline of importance of private defined benefit plans in relation to defined contribution plans in the United States is a major issue of interest to pension actuaries. This decline is undeniable, and has been attributed to numerous factors: costs of government regulation, societal and cultural changes, changed attitudes of employers, and employees' lack of understanding of defined benefit plans. It has also caused some to proclaim the end of a private defined benefit plan. This work analyzes possible macroeconomic factors contributing to the crisis of defined benefit plans, and proposes an alternative hypothesis for the cause of the crisis: the decline of relative attractiveness of defined benefit plans in relation to defined contribution plans due to the shift in the way relative returns to macroeconomic factors of production, i.e., capital and labor, are allocated in the national economy. Possibilities of improvement of the position of defined benefit plans are also discussed. From Actuarial Research Clearing House 1998 Vol. 2.

Description: In this session at the SOA 2003 Washington, DC Spring Meeting, the panelists discuss the value of deferred taxes to the owner of an IRA, 401k or similar product. The time it takes for tax-deferral benefits to overcome typical penalties levied on early distributions is reviewed. They also discuss the effect of tax deferral on the risk profile of investments.