Investment Risk, Bankruptcy Risk, and Pension Reform in Canada
- Full Text PDF
- Author(s): JAMES E. PESANDO
- Published: Apr 30, 2012
- Pages: 741-749
- DOI: 10.1111/j.1540-6261.1982.tb02220.x
The wealth redistributive effects of retroactive termination insurance together with the difficulty of determining insurance premiums suggest that an alternative response, such as improved disclosure of worker benefits in the event of plan wind‐up, may be preferred if the government remains concerned about the security of benefits in underfunded plans. Members of money purchase plans may well be less subject to investment risk than members of defined benefit plans, contrary to the claim of many. In Canada, defined benefit plans appear to have been transformed into defined benefit/money purchase hybrids, and this has several important implications.