We have, up to this point, looked at the defined contribution (DC) system from a mainly American perspective. But while the principles behind DC do not change with geography, the specific circumstances and attitudes that have shaped the system in each country have differed. As a result, different approaches have been tried in different places. We can learn from these experiences.
Part Four therefore begins with a look at the Australian system. This moved from DB to DC in little over a decade, thanks to legislation passed in the early 1990s, to become in many senses the world's most advanced DC society. As a result, it is a natural place to look for lessons in system design, a veritable Petri dish of DC activity. We will also explore the collective DC approaches used by some plans in the Netherlands and Canada. Sandwiched in the middle of this world tour is a description of a bank savings approach to DC, of a fund supermarket approach, and of a retirement income approach. These three models of DC systems differ in what they set out to achieve and hence in how they go about achieving it. Our vision of DC version 2.0 is really a vision of moving from the second of these three models to the third.
So this part is addressed to plan sponsors, consultants, and opinion leaders.