Types of pension plans Defined benefit plan  Defined contribution plan  • Benefit determined by a set formula  • Benefit depends on contributed amount and investment returns  • Sponsor bears investment or longevity risk  • Retiree bears investment and longevity risk  No matter who bears the risks, instruments for investment and longevity risk bearing and hedging are needed  DANMARKS NATIONALBANK  11  Long-term government bonds The ultra-long government bonds are not a recent invention.
The optimum minimum size of a bank (which is difficult to define anyway) has presumably increased in recent years, not least on account of the need to invest in state-of-the-art banking technology, and to ensure more efficient compliance with supervisory requirements.