Questionnaire on Defined Benefit Plan vs Defined Contribution Plan

Questionnaire on
Defined Benefit Plan vs Defined Contribution Plan

While most people agree on the virtues of saving for retirement, many debate the best vehicle to use. Some insist that the defined benefit plans provide the safest arrangement because a definite benefit is promised in exchange for each year of service. A prime example of a defined benefit plan is the pension plan provided by a company to its employees. Others believe that only a defined contribution plan bestows a concrete amount of contribution into the member's account each year, thus guaranteeing the amount of benefits for the member. A prime example of a defined contribution arrangement is a registered retirement savings plan (RRSP). Proponents of each type of plans attribute much risk to the other arrangement. However, both groups claim that the strengths and weaknesses of the defined benefit and defined contribution arrangements are not clearly understood by the general public. We want to test this claim by using the following questionnaire.

You are asked to provide your opinions on a defined benefit plan and on a defined contribution plan. Based on the results of this questionnaire, we shall assess the attitude of the public to these arrangements.

Some information about you

Age:

Sex:

Profession:

Number of years you have been a participant of:
a defined benefit plan
a defined contribution arrangement

Questionnaire

We have identified seven major objectives for a retirement savings arrangement:
1.	"Predictable benefits" -- retirement benefits predictable prior to the actual retirement.
2.	"Stable benefits" -- a stable benefit stream from year to year after retirement.
3.	"Inflation protection" -- increases in retirement benefits each year keeping pace with cost of living increases.
4.	"Post-retirement spouse protection" -- adequate benefit protection for the surviving spouse upon the death of the retiree.
5.	"Pre-retirement protection" -- adequate benefit protection for the employee in the event of job termination, disability, or death.
6.	"Control of benefits" -- the employee's control of the ultimate retirement benefits.
7.	"Ease to understand" -- the ease with which the employee can understand what benefits he/she is accumulating.

Relative importance of the objectives

How do you rank the following seven objectives in order of importance for retirement on a scale of 7 to 1 (7 is the most important)

Objectives (See above explanations)	Ranking (7 to 1) (A different number for each objective)
1. Predictable benefits
2. Stable benefits
3. Inflation protection
4. Post-retirement spouse protection
5. Pre-retirement protection
6. Control of benefits
7. Ease to understand

How well a Defined Benefit Plan fulfills the retirement objectives

Rate the efficiency of the DB plan in fulfilling each retirement objective on a scale of 5 to 1 (5 means extremely efficient)

Objectives (See above explanations)	Rating (5 to 1) (Different objectives may have the same rating)
1. Predictable benefits
2. Stable benefits
3. Inflation protection
4. Post-retirement spouse protection
5. Pre-retirement protection
6. Control of benefits
7. Ease to understand

How well a Defined Contribution Plan fulfills the retirement objectives

Rate the efficiency of the DC plan in fulfilling each retirement objective on a scale of 5 to 1(5 means extremely efficient)

Objectives (See above explanations)	Rating (5 to 1) (Different objectives may have the same rating)
1. Predictable benefits
2. Stable benefits
3. Inflation protection
4. Post-retirement spouse protection
5. Pre-retirement protection
6. Control of benefits
7. Ease to understand

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