Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



This chapter describes a proposed new defined benefit (DB) pension design known as a portfolio pension plan. This design falls within a larger category of so-called ‘shared risk’ pension plans. In the United States, shared risk pension plans address a need created by the limitations of existing retirement plan designs. An alternative to existing designs is needed because DB plans to date have concentrated risk on plan sponsors in a way that makes them financially unsustainable in many, if not most, circumstances. Moreover, existing defined contribution (DC) retirement plans impose risk on employees in a way that is challenging for most individuals to manage. In the past, many employers shared risk with employees by providing both a DB and a DC plan. Nevertheless, this chapter argues that a new model can provide an alternative that better serves employers and employees in the United States.


The published version of this Working Paper may be found in the 2016 publication: Reimagining Pensions.


shared risk, portfolio pension plan

Working Paper Number


Copyright/Permission Statement

All opinions, errors, findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2014 Pension Research Council of the Wharton

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Economics Commons



Date Posted: 26 June 2019