Your point about DC and DB is reasonable. You might note that there is a superior alternative to both. We could support the consumption expenses of the elderly the same way we support the consumption expenses of the young (and how we support the medical expenses of the elderly): through a combination of family responsibility and the tax system. (I wrote about that here: https://www.reuters.com/article/us-pensions-policy-breakingviews-idUSKBN18R20A).
At a more pragmatic level, the logic that makes finance types think bonds are lower risk than equities is insane. Equities perform with the economy over time and are inflation-protected. Bonds are playthings of central banks. It is obtuse, after a decade of negative real interest rates (long as well as short terms), for DB plans to concentrate on bonds. Only in the narrowest possible sense are gilts more "liability driven" than tracker equity funds.
Your point about DC and DB is reasonable. You might note that there is a superior alternative to both. We could support the consumption expenses of the elderly the same way we support the consumption expenses of the young (and how we support the medical expenses of the elderly): through a combination of family responsibility and the tax system. (I wrote about that here: https://www.reuters.com/article/us-pensions-policy-breakingviews-idUSKBN18R20A).
At a more pragmatic level, the logic that makes finance types think bonds are lower risk than equities is insane. Equities perform with the economy over time and are inflation-protected. Bonds are playthings of central banks. It is obtuse, after a decade of negative real interest rates (long as well as short terms), for DB plans to concentrate on bonds. Only in the narrowest possible sense are gilts more "liability driven" than tracker equity funds.