Defined Benefit Vs. Defined Contribution Pension Schemes: Navigate Pension Transitions

Introduction:

Defined Benefit vs. Defined Contribution Pension Schemes equips professionals with a comprehensive understanding of the distinct characteristics and implications of these two primary pension models. This course focuses on analyzing the differences in risk allocation, benefit structures, and administrative requirements. Participants will learn to navigate the complexities of transitioning between DB and DC schemes, develop effective communication strategies, and manage the associated financial and operational challenges. This course bridges the gap between theoretical knowledge and practical application, enabling professionals to make informed decisions and manage pension transitions effectively.

Target Audience:

This course is designed for professionals involved in pension fund management, HR, and financial consulting, including:

• Pension Fund Managers
• HR Professionals (Benefits)
• Financial Advisors
• Actuaries
• Consultants
• Trustees
• Compliance Officers
• Government Officials
• Employee Benefits Managers
• Labor Union Representatives

Course Objectives:

Upon completion of this Defined Benefit vs. Defined Contribution Pension Schemes course, participants will be able to:

• Understand the fundamental differences between Defined Benefit (DB) and Defined Contribution (DC) pension schemes.
• Analyze the risk allocation and benefit structure of DB and DC schemes.
• Understand the administrative and regulatory requirements for DB and DC schemes.
• Implement strategies for transitioning from DB to DC schemes.
• Understand the impact of DB and DC schemes on employee retirement security.
• Implement techniques for communicating pension changes to employees and stakeholders.
• Understand the financial and operational challenges of managing DB and DC schemes.
• Implement strategies for managing investment risks in DC schemes.
• Understand the role of longevity risk in DB schemes and its management.
• Implement techniques for evaluating the performance of DB and DC schemes.
• Understand the impact of market trends and economic factors on DB and DC schemes.
• Evaluate the effectiveness of different transition strategies.
• Enhance their ability to design and manage effective pension schemes.
• Improve employee retirement outcomes and ensure pension scheme sustainability.
• Contribute to the development of sound pension policies and practices.
• Stay up-to-date with the latest trends and best practices in pension scheme design.
• Become a knowledgeable and effective pension scheme management professional.
• Understand the role of technology and data analytics in managing DB and DC schemes.
• Learn how to use pension modeling tools and software effectively.
• Understand the role of governance and oversight in DB and DC schemes.
• Develop skills in communicating complex pension concepts to diverse audiences.
• Learn how to integrate DB and DC scheme considerations into overall HR and financial planning.
• Understand the importance of employee education and financial literacy in DC schemes.
• Develop the ability to analyze and interpret pension scheme data and statistical models.
• Understand the role of international standards and best practices in pension scheme design.
• Learn how to develop transition plans for specific organizational and demographic contexts.

DURATION

10 Days

COURSE CONTENT

Module 1: Introduction to Pension Scheme Types

• Overview of Defined Benefit (DB) and Defined Contribution (DC) pension schemes.
• Understanding the fundamental differences in risk allocation and benefit structures.
• Introduction to hybrid pension plans and other alternative models.
• Historical context and evolution of DB and DC schemes.
• Setting the stage for navigating pension transitions.

Module 2: Defined Benefit (DB) Pension Schemes: Structure and Characteristics

• Analyzing the key features of DB pension schemes.
• Understanding the role of actuarial calculations and liability management.
• Examining the benefits and challenges of DB schemes for employers and employees.
• Understanding the impact of longevity risk and interest rate risk on DB schemes.
• Learning to analyze DB scheme design and operation.

Module 3: Defined Contribution (DC) Pension Schemes: Structure and Characteristics

• Analyzing the key features of DC pension schemes.
• Understanding the role of individual investment accounts and participant choice.
• Examining the benefits and challenges of DC schemes for employers and employees.
• Understanding the impact of market volatility and investment risk on DC schemes.
• Learning to analyze DC scheme design and operation.

Module 4: Risk Allocation and Management in DB vs. DC Schemes

• Comparing risk allocation between DB and DC schemes (employer vs. employee).
• Analyzing the impact of investment risk, longevity risk, and inflation risk.
• Implementing strategies for managing investment risk in DC schemes.
• Understanding the role of risk mitigation techniques in DB schemes.
• Learning to manage risk in both DB and DC schemes.

Module 5: Administrative and Regulatory Requirements

• Understanding the administrative requirements for DB and DC schemes.
• Analyzing the regulatory frameworks governing DB and DC schemes.
• Examining the role of reporting, disclosure, and compliance.
• Understanding the impact of legal and regulatory changes.
• Learning to navigate administrative and regulatory requirements.

Module 6: Transitioning from DB to DC Schemes: Rationale and Strategies

• Analyzing the rationale for transitioning from DB to DC schemes.
• Understanding different transition strategies (e.g., plan freezes, benefit buyouts, hybrid conversions).
• Examining the financial and operational implications of transition.
• Implementing techniques for conducting feasibility studies and risk assessments.
• Learning to develop transition strategies.

Module 7: Impact on Employee Retirement Security

• Analyzing the impact of DB and DC schemes on employee retirement security.
• Understanding the role of financial literacy and employee education.
• Examining the impact of investment performance and longevity on retirement outcomes.
• Implementing strategies for mitigating the impact of transition on employee benefits.
• Learning to assess employee retirement security.

Module 8: Communication Strategies for Pension Changes

• Implementing techniques for communicating pension changes to employees and stakeholders.
• Understanding the principles of effective communication and change management.
• Analyzing the role of employee engagement and feedback.
• Implementing strategies for addressing employee concerns and questions.
• Learning to communicate pension changes effectively.

Module 9: Financial and Operational Challenges in Managing DB and DC Schemes

• Understanding the financial challenges of managing DB and DC schemes (funding, investment performance).
• Analyzing the operational challenges of plan administration and compliance.
• Implementing strategies for managing costs and improving efficiency.
• Understanding the role of technology and automation.
• Learning to manage financial and operational challenges.

Module 10: Investment Management in DC Schemes

• Implementing strategies for managing investment risks in DC schemes.
• Understanding the role of asset allocation, diversification, and investment options.
• Analyzing the impact of investment fees and expenses.
• Implementing techniques for providing investment advice and guidance.
• Learning to manage investments in DC schemes.

Module 11: Longevity Risk Management in DB Schemes

• Understanding the role of longevity risk in DB schemes and its management.
• Analyzing different longevity risk mitigation techniques (e.g., longevity swaps, buyouts).
• Implementing strategies for assessing and managing longevity risk.
• Understanding the impact of demographic trends and mortality improvements.
• Learning to manage longevity risk in DB schemes.

Module 12: Performance Evaluation and Benchmarking

• Implementing techniques for evaluating the performance of DB and DC schemes.
• Understanding the role of performance benchmarks and attribution analysis.
• Analyzing the impact of market trends and economic factors on scheme performance.
• Implementing strategies for performance improvement and risk management.
• Learning to evaluate pension scheme performance.

Module 13: Impact of Market Trends and Economic Factors

• Understanding the impact of market trends and economic factors on DB and DC schemes.
• Analyzing the role of interest rates, inflation, and economic growth.
• Implementing strategies for adapting to changing market conditions.
• Understanding the principles of scenario analysis and stress testing.
• Learning to analyze market trends and economic factors.

Module 14: Case Studies and Best Practices in Pension Scheme Transitions

• Analyzing real-world case studies of successful and challenging pension scheme transitions.
• Learning from best practices across different industries and regions.
• Identifying key lessons learned and challenges in implementation.
• Discussing the role of innovation and adaptation.
• Sharing knowledge and experience.

Module 15: Future Trends and Action Planning for Pension Scheme Management

• Exploring emerging trends and opportunities in pension scheme management (digitalization, personalized retirement solutions, sustainable investing).
• Developing action plans for advancing pension scheme management within organizations.
• Analyzing the role of individual and collective action.
• Understanding how to stay up to date on pension scheme management information.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 5 working days before commencement of the training.