If we take the example of the UK, DB schemes have been losing popularity due to the heavy

burden they place on employers. The majority of private schemes are no longer open to new
employees. Several private DB schemes in the UK are in deficit and presently new
employees are largely being offered the DC schemes.

In Pakistan’s case, a DC approach with compulsory member contributions would be a more

suitable arrangement. The DC approach has the tendency to develop into a self-sustaining
model in the long term and reduce the strain of pension obligations on the government. The
transition from DB to DC would come at a cost but a prudent approach could involve closing
DB to new members only and gradually moving to a complete DC system in a phased
transition.