A study of pension plans show that the vast majority of assets held in Canada are defined benefit (DB) with defined contribution (DC) plans amounting to a very small percentage. The report by Towers Watson shows that just 4 per cent of assets are in DC plans compared to 58 per cent in the US. While DB plans give workers a guaranteed income on retirement the DC model is growing in popularity with employers as they do not have to fund any shortfalls caused by market volatility. Many new employees find that they are only able to join DC schemes.
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