Without alteration, the two systems also respond differently to such changes as increased life expectancy. If the mandated savings rate is no longer appropriate, a defined contribution system will not function as well, but it will continue to function. With a defined benefit system, benefits and taxes must be realigned by legislation in the face of demographic change. Whether repeated legislation in response to changing circumstances is good or bad depends on the quality of the legislative process. No retirement system is without risks, choices, and anomalies.
Many economists see indexed annuities as an appropriate form of retirement income.
Workers might correctly conclude that indexing lowers initial benefits to finance later ones. Defined contribution systems don't insure against a shortened career due to unemployment, declining industries, or poor health. A defined benefit system can do this by decreasing benefits for early retirement at a rate less than is required for a full actuarial adjustment. But that buys insurance at the cost of an implicit tax on work in later years. A plan that helps those forced to retire early also redistributes income to those who voluntarily stop working before normal retirement age.