How Good Are Default Investment Policies in Defined Contribution Pension Plans?

2019 ◽  
Author(s):  
Daniel Duque ◽  
David Morton ◽  
Bernardo Pagnoncelli
Keyword(s):  
Pension Plans ◽  
Defined Contribution ◽  
Investment Policies

How good are default investment policies in defined contribution pension plans?

2020 ◽  
pp. 1-21
Author(s):  
Daniel Duque ◽  
David P. Morton ◽  
Bernardo K. Pagnoncelli
Keyword(s):  
Closed Loop ◽  
Pension Plans ◽  
Investment Model ◽  
Defined Contribution ◽  
Central Question ◽  
Investment Policies ◽  
Private And Public ◽  
Overall Performance ◽  
Using Data ◽  
Investment Choices

Abstract Defined contribution (DC) pension plans have been gaining ground in the last 10–20 years as the preferred system for many countries and other agencies, both private and public. The central question for a DC plan is how to invest in order to reach the participant's retirement goals. Given the financial illiteracy of the general population, it is common to offer a default policy for members who do not actively make investment choices. Using data from the Chilean system, we discuss an investment model with fixed contribution rates and compare the results with the existing default policy under multiple objectives. Our results indicate that the Chilean default policy has good overall performance, but specific closed-loop policies have a higher probability of achieving desired retirement goals and can reduce the expected shortfall at retirement.

Implications of Optimal Investment Policies for Hybrid Pension Plans: Sponsor and Member Perspectives

2005 ◽  
Author(s):  
Raimond Maurer ◽  
Peter Albrecht ◽  
Joachim Coche ◽  
Ralph Rogalla
Keyword(s):  
Optimal Investment ◽  
Pension Plans ◽  
Investment Policies

Transitions from career employment among public- and private-sector workers

2019 ◽  
Vol 18 (04) ◽  
pp. 529-548 ◽  
Author(s):  
Joseph F. Quinn ◽  
Kevin E. Cahill ◽  
Michael D. Giandrea
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Pension Plans ◽  
Full Time ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Private And Public ◽  
Public And Private Sector ◽  
Career Employment ◽  
Public Sector Workers

AbstractDo the retirement patterns of public-sector workers differ from those in the private sector? The latter typically face a retirement landscape with exposure to market uncertainties through defined-contribution pension plans and private saving. Public-sector workers, in contrast, are often covered by defined-benefit pension plans that encourage retirement at relatively young ages and offer financial security at older ages. We examine how private- and public-sector workers transition from full-time career employment, with a focus on the importance of gradual retirement. To our surprise, we find that the prevalence of continued work after career employment, predominantly on bridge jobs with new employers, is very similar in the two sectors, a result with important implications in a rapidly aging society.

Optimal Investment Strategies in Defined Contribution Pension Plans

2011 ◽  
pp. 234-279
Author(s):  
David Blake ◽  
Andrew Cairns ◽  
Kevin Dowd
Keyword(s):  
Optimal Investment ◽  
Pension Plans ◽  
Investment Strategies ◽  
Defined Contribution
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