Skip to main content

Research Repository

Advanced Search

Defined benefit pension decline: the consequences for organizations and employees

de Thierry, Ebony; Lam, Helen; Harcourt, Mark; Flynn, Matt; Wood, Geoff

Authors

Ebony de Thierry

Helen Lam

Mark Harcourt

Matt Flynn

Geoff Wood



Abstract

Purpose
– The purpose of this paper is to use the theoretical and empirical pension literatures to question whether employers are likely to gain any competitive advantage from degrading or eliminating their employees’ defined benefit (DB) pensions.

Design/methodology/approach
– Critical literature review, bringing together and synthesizing the industrial relations, economics, social policy, and applied pensions literature.

Findings
– DB pension plans do deliver a number of potential performance benefits, most notably a decrease in turnover and establishment of longer-term employment relationships. However, benefits are more pronounced in some conditions than others, which are identified.

Research limitations/implications
– Most of the analysis of pension effects to date focuses primarily on DB plans. Yet, these are declining in significance. In the years ahead, more attention needs to be paid to the potential consequences of defined contribution plans and other types of pension.

Practical implications
– In re-evaluating DB pensions, firms have tended to focus on savings made through cost cutting. Yet, this approach tends to view a firm's people as an expense rather a potential asset. Attempts to abandon, modify, or otherwise reduce such schemes has the potential to save money in the short term, but the negative long-term consequences may be considerable, even if they are not yet obvious.

Originality/value
– This paper is topical in that it consolidates existing research evidence from a number of different bodies of literature to make a case for the retention of DB pension plans, when, in many contexts, they are being scaled back or discarded. It raises a number of important issues for reflection by practitioners, and highlights key agendas for future scholarly research.

Citation

de Thierry, E., Lam, H., Harcourt, M., Flynn, M., & Wood, G. (2014). Defined benefit pension decline: the consequences for organizations and employees. Employee relations, 36(6), 654-673. https://doi.org/10.1108/er-02-2013-0020

Journal Article Type Article
Acceptance Date Apr 22, 2014
Publication Date Sep 30, 2014
Deposit Date May 15, 2019
Journal Employee Relations
Print ISSN 0142-5455
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 36
Issue 6
Pages 654-673
DOI https://doi.org/10.1108/er-02-2013-0020
Public URL https://hull-repository.worktribe.com/output/1788220
Publisher URL https://www.emeraldinsight.com/doi/full/10.1108/ER-02-2013-0020