August 2, 2010 — The Wall Street Journal has published the National Institute on Retirement Security’s letter to the editor regarding the economic efficiencies of defined benefit pension plans and the implications of a pension freeze.

NIRS director of programs Ilana Boivie writes that any actuary or economist can explain that, dollar for dollar, a group pension can provide the exact same retirement benefit for half the cost of individual 401(k) accounts. This is because pensions realize cost savings by pooling longevity risk, maintaining optimal portfolio diversification and earning higher investment returns compared to individual accounts.

NIRS director of programs Ilana Boivie writes that any actuary or economist can explain that, dollar for dollar, a group pension can provide the exact same retirement benefit for half the cost of individual 401(k) accounts. This is because pensions realize cost savings by pooling longevity risk, maintaining optimal portfolio diversification and earning higher investment returns compared to individual accounts.