The ongoing long-term decline of traditional defined benefit pensions in the private sector could take a breather as advisers and employers take a closer look at various hybrid DB plan designs. That is most likely to be the case among smaller employers whose owners do not look at a DB plan exclusively from the perspective of maximizing their personal tax-deferred retirement savings opportunities, but also focus their employees’ ultimate financial capacity to retire at reasonable age.
Hybrid designs provide a more balanced sharing of risk between employers and participants. They are sometimes adopted by employers to replace their original standard DB plan, finding it unsustainable. In other cases they may simply start from scratch.
