These days when people who work in the pension industry talk
about the various options available to develop an effective pension
risk management strategy, they are fond of pointing out that when
it comes to looking at the range of plan design options, the
discussion is about a lot more than traditional defined benefit
(DB) verses defined contribution (DC) arrangements. Increasingly,
plan sponsors are expressing interest in considering target
benefit/shared risk plan (TBP) alternatives to the extent such
arrangements are, or appear soon to be, authorized under enabling
legislation in their pension jurisdiction.
The legislative changes to date to accommodate TBP alternatives
should be applauded – in the right circumstances, conversion
to a TBP can be beneficial for all stakeholders involved. (For more
information on TBPs, see our prior posts: "The ABC's of
Target Benefit Plans" Part I, Part II and Part III, and "C.D. Howe Paper: Target Benefit Plans in Canada
– An
