SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)最新文献

{"title":"Defined Contribution Plans: Challenges and Opportunities for Plan Sponsors","authors":"Jeffery V. Bailey, Kurt D. Winkelmann","doi":"10.2139/ssrn.3908085","DOIUrl":"https://doi.org/10.2139/ssrn.3908085","url":null,"abstract":"American workers rely on their employers to provide a way to generate retirement income beyond their Social Security earnings. Many employers still offer traditional defined benefit (DB) pension plans. A growing majority, however, have replaced DB plans with account-based defined contribution (DC) plans. Virtually everyone acknowledges that the basic DC plan design is flawed. Yet as a society with low private savings and a fraying Social Security system, we count on this imperfect structure to serve as a retirement security bulwark. Workers and society both need the employer-sponsored retirement system to function well. Enhancing DC plan design therefore becomes critical. Defined Contribution Plans: Challenges and Opportunities for Plan Sponsors offers guidance to plan sponsors interested in better understanding the primary issues confronting DC plans. We wrote this book from the viewpoint of the plan sponsor seeking to improve the DC system, and it follows five major themes: the plan participant, the plan sponsor, plan design, investments and investment managers, and asset decumulation in retirement. We present the material conversationally from a high-level perspective. We have not sought to write an encyclopedia on DC plans but rather focus on the basic features of well-run plans. We address key challenges facing DC plans and offer associated design and policy recommendations for plan sponsors and other interested parties to consider. Plan design improvements almost certainly will be incremental, rather than sweeping top-down changes mandated by regulators. Plan sponsors individually will make the important decisions that have lasting consequences for participants and for society. Our objective is to spark interest among sponsors, encouraging them to carry out additional research and take action. We believe the DC system will be strengthened by informed sponsors advocating for and implementing thoughtful strategic changes to their plans.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128851668","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Risk-managed Collective Pension Schemes with Intergenerational Benefit Smoothing","authors":"Christoph Berninger, S. Mittnik","doi":"10.2139/ssrn.3885894","DOIUrl":"https://doi.org/10.2139/ssrn.3885894","url":null,"abstract":"In view of the repeated severe market downturns since the turn of the century, the interest in risk-based investment strategies has grown in recent years. However, such strategies have not yet made major inroads into the design of pension programs. In this paper, we fill this gap by combining a risk-managed investment strategy with a pension scheme where benefits are smoothed across generations by establishing a collective reserve. We demonstrate that combining the two helps to improve the performance of the pension investments and decreases the risk of a negative reserve in times of a market crisis. We furthermore investigate the implications of imposing varying degrees of diversification across assets in such a scheme.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127176075","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Room to Thrive: Why Principles-based Standards Make Sense for Regulating Contingent Pension Plans","authors":"Barry Gros","doi":"10.2139/ssrn.3872693","DOIUrl":"https://doi.org/10.2139/ssrn.3872693","url":null,"abstract":"As membership in traditional defined-benefit pension plans declines, plans in which benefits are contingent on the financial status of the plan are becoming more common. Rather than placing all the risk on sponsors to deliver guaranteed benefits to members, these contingent pension plans require members to take on at least some of the risk that benefits may or may not meet expectations. <br><br>This E-Brief focuses on two types of contingent plans, target-benefit plans and multi- employer pension plans. These plans offer a different promise than traditional defined-benefit plans and the contract with plan members is different. This needs to be reflected in how they are regulated. Regulators should adopt a principles-based approach to financing-related standards, while using a rules-based approach for aspects such as governance and member communication. Principles-based regulations focus on desired outcomes rather than processes. Most contingent plans have members materially involved in the running of the plan, involved in making all key decisions, which makes principles-based regulations particularly well fitted. Plan governors would have more flexibility in how they manage the financing risks, rather than having to comply with generic rules that attempt to work on a universal basis. The streamlining of rules and an emphasis on objectives promote compliance, and enhance the ability of regulations to achieve their desired outcomes.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131004248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Impact of Auto Portability on Preserving Retirement Savings Currently Lost to 401(k) Cashout Leakage","authors":"Jack L. VanDerhei","doi":"10.2139/ssrn.3438999","DOIUrl":"https://doi.org/10.2139/ssrn.3438999","url":null,"abstract":"Many of the perceived limitations of 401(k) plans were partially dealt with via previous automation practices encouraged by the Pension Protection Act of 2006, including automatic enrollment, auto-escalation, and the utilization of target-date funds as investment options, all of which served to increase participation rates, encourage savings, and optimize asset allocations. \u0000 \u0000Significantly, no effective solution has been implemented to address the problem of 401(k) cashout leakage, which occurs post-termination, where each year approximately 40 percent of terminated participants elect to prematurely cash out 15 percent of plan assets. For 2015, EBRI estimates that $92.4 billion was lost due to leakages from cashouts, representing a serious problem that affects the potential of 401(k) plans to produce adequate income replacement in retirement. \u0000 \u0000This Issue Brief summarizes EBRI research analyzing the impact of auto portability, where a participant’s account from a former employer’s retirement plan would be automatically combined with their active account in a new employer’s plan. This would help keep the defined contribution (DC) assets in the retirement system and — in theory — reduce leakage from cashouts upon employment termination. \u0000 \u0000Our research found that: \u0000 \u0000• Considering auto portability as a standalone policy initiative, we project the present value of additional accumulations over 40 years resulting from “partial” auto portability (participant balances less than $5,000 adjusted for inflation) would be $1,509 billion, and the value would be $1,987 billion under “full” auto portability (all participant balances). Under partial auto portability, those currently 25–34 are projected to have an additional $659 billion, increasing to $847 billion for full auto portability. \u0000 \u0000• Auto portability produces significant decreases in retirement deficits for specific demographic segments, ranging from 13 percent for single females to 29 percent for married households where the female dies first. For households with 21–30 years of future eligibility, the decreases range from 21 percent for single females to 38 percent for married households where the female dies first. \u0000 \u0000• Auto portability, when combined with automatic-enrollment-enabled defined contribution plans, results in significantly higher defined benefit (DB) plan generosity parameters needed for equivalence, suggesting that auto portability could assist in the ongoing shift from DB to DC plans. \u0000 \u0000• When considered in tandem with other legislative initiatives that expand workplace access to retirement plans, we measured the incremental impact of auto portability. An analysis that combined auto portability with auto- IRAs showed that, in aggregate, the Retirement Savings Shortfalls (RSS) would be reduced by an additional $293 billion for a total reduction of $697 billion or 18.2 percent of the current deficit. This analysis suggests that while policy to expand retirement plan coverage can s","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125571783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Multiemployer Pension Plans: Current Status and Future Trends","authors":"A. Munnell, J. Aubry, C. Crawford","doi":"10.2139/ssrn.3122634","DOIUrl":"https://doi.org/10.2139/ssrn.3122634","url":null,"abstract":"Multiemployer pension plans, like other employer plans, have been challenged by two financial crises since 2000. The majority of multiemployer plans are returning to financial health, but a substantial minority face serious funding problems that are exacerbated by unique structural challenges in the multiemployer sector. These challenges include a high ratio of inactive to total participants, high rates of negative cash flow, and inadequate withdrawal penalties so that exiting companies do not cover the costs they leave behind. The Multiemployer Pension Reform Act (MPRA) of 2014 has not proved to be a cure-all for the multiemployer crisis. As of November 2017, the U.S. Treasury Department has approved four of the 15 benefit-cut requests submitted by these plans. Of the remainder, one application remains under review, five applications have been denied, and five have been withdrawn. So, while the ultimate effectiveness of MPRA still remains to be seen, it is clear that other solutions must also be explored to alleviate the multiemployer burden. At this stage, the majority of proposed solutions to the multiemployer challenge fall into two categories: alleviating the burden of orphaned members – workers left behind when employers exit – and providing subsidized loans – either through direct government lending or government guarantees on private sector loans. Whatever the ultimate solution, a case can be made for a package that involves contributions from employers (tailored not to sink already fragile plans), from plan participants, and from taxpayers. Any solution to the multiemployer problem must be comprehensive, helping not only those in serious trouble today but also staving off future problems. Early action might stabilize other plans heading for trouble. One clear warning sign for plans is a negative cash flow rate in excess of negative 10 percent.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124374800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economic and Financial Approaches to Valuing Pension Liabilities","authors":"Robert Novy-Marx","doi":"10.2139/ssrn.2337135","DOIUrl":"https://doi.org/10.2139/ssrn.2337135","url":null,"abstract":"Financial economics holds that payment streams should be valued using discount rates that reflect the cash flows’ risks. In the case of pension liabilities, the appropriate discount rate for a pension fund’s liabilities is the expected rate of return on a portfolio that would be held under a liability-driven investment policy. The valuation of defined benefit (DB) pension obligations involves choices revolving around deciding 1) what future benefit payments to recognize today (i.e., which liability concept to use); and 2) from whose point of view to value the liabilities. Moving towards modeling the distribution of future liabilities using a \"risk-neutral\" framework would allow for calculating the present value of the future liabilities more accurately. This would provide policymakers with information more relevant for decision-making, and it would also permit easier communication of the risks facing the Pension Benefit Guaranty Corporation’s PIMS model via a single univariate statistic.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"58 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128279126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A Note on Pension Coverage and Earnings Replacement Rates of Retired Men: A Closer Look at Distributions","authors":"Yuri Ostrovsky, G. Schellenberg","doi":"10.2139/ssrn.2029831","DOIUrl":"https://doi.org/10.2139/ssrn.2029831","url":null,"abstract":"In spite of the importance of registered pension plans (RPPs) in discussions of Canada's retirement income system, very few Canadian studies have examined the financial outcomes experienced by RPP members and RPP non-members. Using data from the Longitudinal Administrative Database (LAD), this paper compares the distributions of earnings replacement rates achieved by retired men who were or were not members of a registered pension plan (RPP) in 1991 and/or 1992. The distributions of earnings replacement rates of men who were not RPP members are far more dispersed than those of men who were RPP members. And while the average earnings replacement rates of the two groups are generally comparable, the median earnings replacement rates of RPP non-members are lower than those of RPP members as a result of asymmetry in the distributions.","PeriodicalId":207642,"journal":{"name":"SIRN: Pension Type (Defined Benefit/Defined Contribution) (Sub-Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131232580","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}