In Canada, there are two types of pension plans: defined benefit plans, and defined contribution plans. Most employers in the public sector including government, hospitals, schools etc. offer defined benefit pension plans to their employees. However, this is not the case in the private sector. It seems like a lifelong security if an employee is enrolled in a Defined Benefit plan because the person will receive a fixed benefit every month until death. Unlike a defined-benefit plan, where employees know exactly what their benefits will be in retirement, the only certainty in a defined-contribution plan is the amount that the employee contributes.
From the employees’ perspective, it’s obvious that DB plan is a better choice. However, research has shown that there are fewer defined-benefit plans, particularly in the private sector in the past few decades. “The percentage of public-sector employees who have DB plans has declined by about four per cent over the past 20 years while the number of private-sector DB pension plans has dropped from 21.9 per cent in 1997 to 9.2 per cent in 2017, as many employers move toward defined-contribution plans, putting investment risk on employees’ shoulders. ”
There are several reasons that employers are not willing to offer DB plans anymore. From an employer’s perspective, defined-benefit plans are an ongoing liability. Funding for the plans must come from corporate earnings, and this has a direct impact on profits. A drag on profits can weaken a company’s ability to compete. Switching to a defined-contribution plan which is mainly funded by employee contributions, saves a significant amount of money. Secondly, estimating pension liabilities is complex. Companies offering a defined-benefit pension plan must predict the amount of money that they will need in order to meet their obligations to employees when they retire.
Conduct a research about whether the Canadian government should encourage employers (especially in the private-sector) provide Defined-Benefit pension plans to their employess.
• Analyse the benefits and drawbacks of defined benefit plans from both the employers’ perspectives and the employees’ perspectives.
• Beneficiaries’ opinions (Data, statistics to support the statements)
• DB plan’s economic impacts (Data, statistics to support the statements)
• Research paper needs to include:
o the thesis statement and introduction,
o structure and technical aspects of the research paper,
o quality of the research,
o quality of the analysis, and
o persuasiveness of the argument (supported by the research and analysis).
NOTE: Research Papers will be subject to a review using Turnitin.
Please include as many as you can: the concepts of financial accountability, the public policy, “value for money”, how financial accountability and related accountabilities are monitored and assessed in both public and private sectors. “The expectation of Canadians to have a right to “know” about accountability is higher with respect to the government, and charitable and not-for-profit sectors, than it is for private sector entities.”
There is one link may help: https://www.federalretirees.ca/en/news-views/news-listing/june/the-future-of-defined-benefit-pension-planshttps://www.federalretirees.ca/en/news-views/news-listing/june/the-future-of-defined-benefit-pension-plans
Please provide the reference links. Thanks a lot!