According to actuarial reports, by the year 2014, the amount of money being saved in worldwide defined-contribution will take over the amount of money that is defined-benefit. This poses a problem for many people. In a scheme of defined-contribution, the pension is dependant on the performance of the investment in which the employee has paid, taking a risk of poor investment. On the contrary, with schemes that are defined-benefit employees are promised an income upon retirement based on their pay and how long they performed service. This way the employer, instead of the employee, is taking the risk.

An even greater problem is the fact that the amount contributed by both the employees and the employers into defined-contribution schemes is less than what is contributed into the defined-benefit schemes. No matter how you argue it, the less money you put in the less money you are going to get out of it. To make matters worse, the cost of defined-contribution is higher on average. Not to mention the fact that defined-contribution schemes require a decision-making ability for which the employee is not properly equipped.

The end result is that employees will find themselves with far less of an income from their retirement payments than they expect.