Room to Thrive: Why Principles-based Standards Make Sense for Regulating Contingent Pension Plans

Pension Rules Stifle Innovation for Target-Benefit Plans

• Current pension rules, designed from a defined-benefit perspective, are a bad fit for target-benefit pension plans.
• Author Barry Gros argues contingent pension plans, especially target-benefit plans and multi-employer plans, need to be uniquely managed, communicated and regulated as they play an increasingly important role in delivering retirement benefits.
• Regulators should adopt a principles-based approach to financing-related standards, while using a rules-based approach for aspects such as governance and member communication.