DB plans outperforme DC plans by 1%

Watson Wyatt has been comparing rates of return between defined benefit
(DB) and defined contribution (DC) plans for more than 10 years.¹
This most recent comparison finds that between 1995 and 2006, DB plans
outperformed DC plans by an average of 1 percent per year.



Asset-Weighted Median Rates of Returns
DB and 401(k) Plans — 1995-2006

Year	Number of sponsors	DB plan	401(k) plan	Difference
2006	914	12.90%	11.34%	1.56%
2005	2, 584	7.74%	6.69%	1.05%
2004	2,583	11.81%	9.80%	2.01%
2003	2,514	21.35%	19.68%	1.67%
2002	2,085	-8.56%	-10.93%	2.37%
2001	2,239	-3.78%	-6.07%	2.29%
2000	2,058	-0.01%	-2.76%	2.75%
1999	1,472	13.46%	14.41%	-0.95%
1998	2,958	14.25%	15.29%	-1.04%
1997	2,931	18.82%	19.73%	-0.91%
1996	3,034	14.53%	14.10%	0.43%
1995	3,063	21.10%	19.20%	1.90%
Average		10.30%	9.21%	1.09%

Source