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Management Sciences and Quantitative Methods Commons™
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Articles 1 - 2 of 2
Full-Text Articles in Management Sciences and Quantitative Methods
Cross-Tested Defined Contribution Plans, Ho Kuen Ng
Cross-Tested Defined Contribution Plans, Ho Kuen Ng
Journal of Actuarial Practice (1993-2006)
Cross-tested plans are defined contribution plans that test allocations for nondiscrimination. The test is based on a plan's actuarial equivalent annuity benefits. Cross-tested plans have become popular among small plan sponsors after the release of the nondiscrimination regulations. This paper investigates the pros and cons of cross-testing.
Simulation Of Investment Returns For A Money Purchase Fund, Zaki M. Khorasanee
Simulation Of Investment Returns For A Money Purchase Fund, Zaki M. Khorasanee
Journal of Actuarial Practice (1993-2006)
This paper examines the problem of investment risk in money purchase pension plans. The disadvantages of modeling equity returns as independent, identically distributed random variables are conSidered, and a modified stochastic model of equity returns is proposed. This modified stochastic model is used to estimate the variability in a plan member's retirement fund and to compare various alternatives to investing 100 percent of the assets in ordinary shares. Varying conclusions are drawn about the likely success of these alternative investment strategies in reducing investment risk.