Defined benefit plans delivered an average return of 10.13% between 1995 and 2007, whereas 401(k) plans rose an average of 9.06% a year, according to a report released Wednesday by consulting firm Towers Watson. While that differential is just over one percentage point, the six largest DB plans analyzed outperformed the six smallest by three percentage points in that timeframe.

The 1% average long-term edge continued in 2008, even though both types of plans lost value. However, whereas defined contribution plans lost 10% or more—some plummeting by as much as 40%—some pension plans reported small positive returns. In fact, the median investment return of DB plans in 2008 was 25.27%, whereas the median return of DC plans was -26.20%.

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