Insight
Capital generation and return metrics in Europe
Despite its ease of calculation, capital generation and return—measured as a change in eligible own funds—may not be the most useful metric.
Today, many defined benefit (DB) retirement plans have been frozen or even eliminated altogether and replaced by defined contribution (DC) plans. However, for some organizations, an alternative DB plan may still be the best way to provide pension value for employees while ensuring reduced cost and volatility for the plan sponsor.
Insight
Despite its ease of calculation, capital generation and return—measured as a change in eligible own funds—may not be the most useful metric.