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Actuarial Conservatism: Not In Public Sector Defined Benefit Pension Plans, Brian A. Jones
Actuarial Conservatism: Not In Public Sector Defined Benefit Pension Plans, Brian A. Jones
Journal of Actuarial Practice (1993-2006)
Most actuaries tend to be conservative, and most, including this writer, probably would be happy to be so categorized. But actuarial conservatism may not be the best rule in defined benefit public sector pension plans. This paper argues that it is not appropriate for actuaries to employ conservatism assumptions in such public sector plans.
A Critique Of Defined Contribution Plans Using A Simulation Approach, David M. Knox
A Critique Of Defined Contribution Plans Using A Simulation Approach, David M. Knox
Journal of Actuarial Practice (1993-2006)
During the 1980s there was a trend in many countries away from defined benefit plans toward defined contribution plans. This development means that the individual member bears the full investment risk in the preretirement period and the annuity rate risk at retirement, as no pension benefit (expressed as a percentage of salary) is provided. This paper, through the use of a stochastic model for both inflation and a range of investment returns, analyses the distribution of retirement incomes that will be produced from a defined contribution plan. The impacts of changing entry and exit ages, different investment strategies, alternative career …