Wharton Pension Research Council Working Papers
 

Title

The Portfolio Pension Plan: An Alternative Model for Retirement Security

Document Type

Working Paper

Date of this Version

9-1-2014

Abstract

This chapter describes a proposed new defined benefit (DB) pension design known as a portfolio pension plan. This design falls within a larger category of so-called ‘shared risk’ pension plans. In the United States, shared risk pension plans address a need created by the limitations of existing retirement plan designs. An alternative to existing designs is needed because DB plans to date have concentrated risk on plan sponsors in a way that makes them financially unsustainable in many, if not most, circumstances. Moreover, existing defined contribution (DC) retirement plans impose risk on employees in a way that is challenging for most individuals to manage. In the past, many employers shared risk with employees by providing both a DB and a DC plan. Nevertheless, this chapter argues that a new model can provide an alternative that better serves employers and employees in the United States.

Comments

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

Keywords

shared risk, portfolio pension plan

Working Paper Number

WP2014-13

Copyright/Permission Statement

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

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Date Posted: 26 June 2019