Wharton Pension Research Council Working Papers
 

Title

Back to the Future: Hybrid Co-operative Pensions and the TIAA-CREF System

Document Type

Working Paper

Date of this Version

9-1-2014

Abstract

Hybrid retirement plans that combine the best features of defined benefit and defined contribution plans can provide an efficient and equitable method of ensuring retirement security for workers. Co-operative pension structures also enhance retirement security through risk pooling and leveraging economies of scale. Yet most U.S. private sector workers are not covered by these types of plan design. The TIAA-CREF system, which began in 1918 and covers millions of workers in the non-profit sector, provides an example of a plan design with features of a hybrid co-operative pension. We examine the historical performance of the core components, TIAA (a guaranteed fixed annuity) and CREF (a variable annuity), discuss key design features, and analyze data on contributions, investment returns, risk pooling, and retirement distribution characteristics.

Comments

The published version of this Working Paper may be found in the 2016 publication: Reimagining Pensions.

Keywords

Hybrid plan, annuities

Working Paper Number

WP2014-11

Copyright/Permission Statement

The views expressed are the authors and do not necessarily reflect the views of TIAA-CREF. Any errors are our own. All opinions, errors, findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2014 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Date Posted: 26 June 2019