The shift from DB to DC began in the late 80's and was in full force by the late 90's. The recapture of pension contributions fueled many S&P profit statements over that same period. By the mid 00's DB plans had been phased out for most of corporate America, the exception being executive coverage.then during the 2000 crash, equities tanked and rates dropped, a lot
companies started taking GAAP charges to equity and faced, many for the first time in years, significant statutorily required pension contributions
hence the shift to DC plans
I've already found a few studies that show for the same benefit, DB plans can be more cost effective than DC plans. However, that's assuming full participation. That may be appropriate for a true comparison, but it's not the reality. DB plans are cheaper if all employees participate in DC plans, but they clearly don't. Everyone who would have a DB plan, wouldn't necessarily participate in a DC plan at any given company. So employers are saving via DC plans in part because participation is less than DB (full) plans, and avoiding the long term liability.
Hmmmmm....hadn't thought about that.
Another article said that while companies saved a lot by dumping DB plans and going to DC plans or combinations thereof, the savings came largely from reducing employee benefits at the same time. And companies also didn't want the uncertainty of an ongoing DB liability, especially with the COL calculations that were built in to many plans and after the double whammy of very high inflation back in the early 80's and globalization hurting many industries back around that time.
I'd still be beyond shocked to see DB plans come back...
Making DB appear more or less expensive than DC depends on the financial assumptions and can, with some ease, go either way. The problem is, when implemented in the real world, DB plans are subject to changing economic conditions, while DC are not. The real world cost to a business clearly favors the DC plan, hence it is the overwhelming choice.