Comparing Costs and Risks of Retirement Plans for Sponsors

Q3 Social Sciences Social Security Bulletin Pub Date : 2012-04-12 DOI:10.2139/ssrn.1626826
G. Pang, M. Warshawsky
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Abstract

This stochastic simulation analysis compares funding costs and volatilities for private sponsors of traditional defined benefit (DB), pension equity (PE), cash balance (CB), and defined contribution (DC) retirement plans. Plan provisions of equivalent benefit generosity in the different plan types are determined. The modeling includes current funding requirements and practices as well as a comprehensive set of uncertainties in asset and labor markets. The results show that costs and risks for sponsors vary significantly with plan types, investment and funding strategies, and participant demographics. The hybrid PE and CB plans exhibit characteristics of cost efficiency, as in the DB plan, and risk reduction, as in the DC plan, for plan sponsors under conventional investment strategies. These features are more saliently observed in the CB plan, but it is also more difficult to implement effective asset–liability management strategies for it.
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比较发起人退休计划的成本和风险
这个随机模拟分析比较了传统固定收益(DB)、养老金权益(PE)、现金余额(CB)和固定缴款(DC)退休计划的私人发起人的融资成本和波动性。确定不同计划类型的同等利益慷慨的计划规定。该模型包括当前的资金需求和实践,以及资产和劳动力市场的一系列全面的不确定性。结果表明,保荐人的成本和风险随计划类型、投资和筹资策略以及参与者的人口统计特征而有显著差异。对于计划发起人来说,混合PE和CB计划在传统投资策略下表现出成本效率(如DB计划)和风险降低(如DC计划)的特点。这些特点在债转债计划中表现得更为明显,但对其实施有效的资产负债管理策略也更加困难。
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来源期刊
Social Security Bulletin
Social Security Bulletin Social Sciences-Social Sciences (miscellaneous)
CiteScore
0.70
自引率
0.00%
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0
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