Risk-sharing Alternatives for Pension Plan Design: An Overview and Case Studies

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Wharton Pension Research Council Working Papers
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Pension plan risk
risk sharing
pension plan design
defined benefit
defined contribution
risk adjustment
hybrid plan
Economics
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Rappaport, Anna M
Peterson, Andrew
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Abstract

Pension plan designs range from those that place virtually all of the risk on the plan (and plan sponsor) to those that place all of the risk on the individual covered by the plan. Traditional plans include designs that are at both ends of this spectrum, but there is increasing attention to plans that share risk. This chapter identifies different risks and discusses methods of sharing risk, both traditionally and in recent plan designs. Two case studies illustrate recent developments. We include a discussion of future directions.

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2014-09-01
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The published version of this Working Paper may be found in the 2016 publication: Reimagining Pensions (https://pensionresearchcouncil.wharton.upenn.edu/reimagining-pensions-2/).
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