Although the Superannuation retirement program in Australia uses a defined contribution retirement plan design, retirement benefits in many countries base their retirement system on a defined benefit design. For example, the retirement system in France consists of a pension plan (i.e., defined benefit) that has the following features:

(a) retiree must reach age 65 to receive full retirement benefits and have worked for a total of 40 years;

(b) the retirement salary is based on providing 70 percent of the average salary over the 20 best salary years during an individual’s employment history;

(c) the system is funded on taxes taken from the incomes of the working population in France and these funds are transferred directly to the population of retirees. With a group of four or five students compare the advantages and disadvantages of the French retirement system based on a defined benefit plan, and the Australian retirement system which is explained in the case presentation. Which system does your team prefer? Be prepared to share your team findings with the class.