Why we still need to care about Defined Benefit Plans.

When teaching pensions I sometimes think that maybe I should just give the pension expense/ Cash entry that is needed by firms that provide defined contribution plans, since it seems that no company would start (or maybe even continue) a defined benefit plan.

However, we have to remember that most companies still maintain separate defined benefit plans for highly compensated employees. These pension plans are non-qualified plans, in that they do not qualify for tax benefits but they are still provided by companies and they are quite lucrative.

A nice article about these types of plans.