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If employers are going to use retirement benefits to provide incentives to employees to defer retirement, defined benefit plans offer a better mechanism than defined contribution plans. Even without modifying the design, a defined benefit plan generally has a built-in incentive for working longer. On the employer side, the actuarial calculations and funding issues of a defined benefit plan could be affected by employees deferring retirement. In general, qualified (defined benefit) plans could have provisions to encourage or discourage early retirement.
Incentive to delay retirement already included in DB plans Barry B Burr Workforce Management; Nov 2008; Docstoc pg. 6 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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