Lifetime income – the DC system’s missing design feature

Something is missing from the defined contribution (DC) system.

If DC is meant to be a retirement system, then it should provide income that supports participants throughout retirement. However, retirement systems do not come into existence fully formed; they begin with fairly simple design features and evolve over time. In its earliest days, the DC system was a savings (or accumulation) system, primarily a supplement to the defined benefit system. Managing the payout phase was not a priority. Several decades on, the system has matured. The absence of this feature cannot be overlooked any longer.

In this paper we will describe what we believe to be the required steps to resolve this situation.

Suggested pages

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Proposing a stronger DC purpose
Best practices in defined contribution pre-publication draft