Thesis advisor: Matthew S. Rutledge / In the past several decades, saving for retirement has significantly changed, with the large replacement of Defined Contribution for Defined Benefit plans, as well as the unreliability of Social Security given the aging population. This paper analyzes retirement wealth across three generational cohorts—Baby Boomers (1946-1964), Gen Xers (1965-1980), and Millennials (1981-2000)—in order to compare preparedness and determine whether or not younger cohorts have compensated for the future unreliability of other traditional retirement income sources. The results suggest that levels of retirement wealth do not significantly differ across cohorts at all age profiles. Therefore, younger generational cohorts have not increased the amount of personal saving in order to maintain their pre-retirement standards of living throughout retirement. These results indicate that a change in saving structure and policy may be necessary to ensure that younger cohorts retire out of poverty. / Thesis (BA) — Boston College, 2017. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Arts and Sciences Honors Program. / Discipline: Economics.

This paper seeks to examine the failures of the current retirement plan structure, focusing on the structure’s reliance on unpredictable future market returns and the unwillingness of the parties involved to negotiate in order to further enhance their own self-centered interests. Currently, both defined contribution and defined benefit plans encounter a funding crisis in both the public and the private sectors. This paper will discuss how retirement plans, by nature, rely on assumptions of market returns, which naturally depend on the volatility of the market and increase the risk and uncertainty in retirement plans. In addition, since defined benefit plans mostly exist in the public sector today, this paper will examine defined benefit plans in relation to the public sector’s funding crisis and hope to shed light on the politics and tensions between the parties involved in public retirement plans that are preventing effectiveness and efficiency. Finally, this paper will also present alternative retirement plan strategies for which academics and scholars have advocated. However, at the end of the day, as opposed to relying on others to dictate one’s future benefits, which are based on the goodwill of others and uncertainty in the market, Americans should recognize their lack of savings and improve their personal financial literacy and develop individualized savings plans.

This study examined the determinants of public pension fund performance through the lens of agency theory. The study sought to answer the following questions: (1) How much of the fluctuation in the performance of pension plans is due to political interference - either directly from decisions made by legislatures or through the governance structure of the pension boards, after controlling for asset allocation, plan size, and other external factors? (2) Do pension board expertise, education and training, and information disclosure requirements improve the performance of pension plans? (3) Do pension trustees strategically determine the actuarial rate of return (discount rate) in order to reduce contributions in times of fiscal stress for the pension sponsor? Using longitudinal data of pension fund performance over the period 2000 to 2009 and instrumental variables methods to address endogeneity issues, the study found partial support for the agency theory hypotheses. The results indicate that political interference through reduced contributions was the main factor explaining pension performance. There was no direct evidence about the negative impact of politically appointed trustees on pension performance. The impact of these findings for current policy and future research are discussed.

There are two labor insurance pension systems running in Taiwan at this moment in time; the labor insurance pension runs by the government, and the labor standards law pension system both old and new systems are the responsibility of the private companies. The labor insurance pension was introduced in 1950. Through the years due to the population ageing; people are living longer and having fewer children, the rapid changes of economy and etc. the original lump sum pension is no longer enough to sustain a standard of living for the worker-retirees. Moreover, the rate of the labor turnover is high for the reason that the majority of Taiwanese private companies are small to medium enterprises with the average life expectancy of around 13 years only. Therefore most of the workers who work for the private companies are not qualified to claim pensions after their retirements although they are covered by the labor standards law pension scheme. The pension provision intends to prevent poverty in old age but under this circumstance those retirees are not having their financial security in the old age and are creating social issues. To reinstate this issue, the labor insurance pension system has carried out by the government in January 2009, after a major update of the labor standards law pension system in July 2005, the method of repayment has changed from the defined benefit plan to the defined contribution plan in addition to allowing the qualifying years carry forward to the new employers when the workers change jobs. Furthermore, the pension repayment is revolutionized from a single lump sum payment to an individual retirement account system complemented by monthly repayments. All of these changes are to secure the worker-retirees financially in their old age. The objectives of this study disclose the transformations of the labor retirement insurance pension systems in Taiwan and the existing modification of the Labor Insurance Act, the benefits of the Labor Standards Act pension system along with the revised Labor Pension Act. A few important factors below have been concluded in this study after analysed the revise of pension benefits systems: First of all, the repayment has changed from a single lump sum payment to monthly repayments. Secondly, the method of repayment has changed from the defined benefit plan to the defined contribution plan. Finally is to determine who are safeguarded? The protection of the social insurance is not only for the small specific groups of people but the majority of individuals. As a result, nowadays the labor pension benefits systems in Taiwan have achieved the task of securing a standard living for the retired workers. The concept of this study is to learn the affect of the changing of the economic climate and increased life expectancy on the possible forthcoming pension¡¦s crisis followed by constructive proposals to anticipate the existing labor insurance pension systems meet the needs of the worker-retirees and achieve the objectives of sustainable management of the pension systems and maintain a secured society in Taiwan.

From the implementation of National Health Insurance on March 1, 1995 in Taiwan, the public has obtained it¡¦s benefit, and it¡¦s really a blessing for Taiwanese. Following the implementation of National Health Insurance Policy, the public began having demands for National Pension due to the aging of society from 1993. As a result the authorities including the Ministry of the Interior which is in charge of National Pension, the Council of Agriculture which plans Farmer Pension, and the Council of Labor Affairs which proposes reforming Labor Pension Payment all show their attitude to take charge then positively frame each kind of pension systems. In fact, the coming of National Pension which is a blessing for the public could be the shackles to future generations. Blessing or shackles, it all depends on whether the formation of National Pension is for the public¡¦s benefit or only for the political intention. Is it for the people¡¦s lifetime protection and peaceful old age or only to make good the commitment made during the campaign? Is it a long-term, integral and foresighted consideration about people¡¦s demand or merely a short-term, sectional and realistic payback? With the basis of economic development to measure the long-term burdens and take improving financial affairs as an important condition, or, there is only one-year budget thus the local government have to raise funds and rely on central government subsidies? National Pension and National Health Insurance are both the nation¡¦s social security business, in order to benefit the public and not to recommit the same error of the current insurance systems, the authorities and other related groups should find out people¡¦s true demands and consider whether the people could afford the insurance premium but also take advantage of other countries¡¦ experience as consultation. This article is to probe into the achievement of National Pension implementation in Japan¡Xan orient country which has similar cultural background and family social formations with Taiwan.¡Xand to understand the background, current status, and the achievement of the implementation then take their strong points as an example to us. The Taiwan government planned to carry out National Pension in 2000, which is a significant social welfare policy after the implementation of National Health Insurance; unfortunately it doesn¡¦t come into effect even to this day due to the political rivalries and the substitution of political party. National Pension is a kind of compulsory savings scheme; it¡¦s a kind of insurance program and also a project of wealth redistribution. Furthermore, National Pension can be taken as the rearrangement of economic resources to regulate individual¡¦s wealth and income in the society, the arrangement of pension system would influence the management of whole economic system. The performance of pension has its dual purpose, the positive is to undertake the horizontal integration to have a healthy aged pension system; the passive is to grasp the opportunity to keep political power and electoral factors from causing the allowance or welfare systems become disordered. Lastly, to compare the main difference of pension implementation and the feasibility analysis after performance between Taiwan and Japan. Whether the pension can be put into practice or not depends on if we can achieve the most effective resources allocation of social resources, then we can see the economic benefits of pension system.

This study examined the determinants of public pension fund performance through the lens of agency theory. The study sought to answer the following questions: (1) How much of the fluctuation in the performance of pension plans is due to political interference - either directly from decisions made by legislatures or through the governance structure of the pension boards, after controlling for asset allocation, plan size, and other external factors? (2) Do pension board expertise, education and training, and information disclosure requirements improve the performance of pension plans? (3) Do pension trustees strategically determine the actuarial rate of return (discount rate) in order to reduce contributions in times of fiscal stress for the pension sponsor? Using longitudinal data of pension fund performance over the period 2000 to 2009 and instrumental variables methods to address endogeneity issues, the study found partial support for the agency theory hypotheses. The results indicate that political interference through reduced contributions was the main factor explaining pension performance. There was no direct evidence about the negative impact of politically appointed trustees on pension performance. The impact of these findings for current policy and future research are discussed.

Die vorliegende Arbeit behandelt die Anlage von Pensionsvermögen im Rahmen von Contractual Trust Arrangements. Es wird untersucht, welche Anlagestrategien sich unter Berücksichtigung bilanzieller, verpflichtungs- und vermögensseitiger Rahmenbedingungen zur Anlage von Pensionsvermögen eignen. Anhand eines geeigneten Anlagemodells für Pensionsvermögen und der Durchführung einer stochastischen Simulation wird analysiert, welchen Einfluss unterschiedliche Anlagestrategien auf die Entwicklung des Pensionsvermögens haben. Die Arbeit geht zunächst den Hintergrund der betrieblichen Altersversorgung und Contractual Trust Arrangements in Deutschland ein. Zur Abbildung der Verpflichtungsseite und der Mitarbeiterstruktur des Unternehmens wird unter Einbezug aktuarischer Ansätze ein Mitarbeitermodell entwickelt. Das in der Arbeit entwickelte Portfoliomodell integriert die Verpflichtungs- und Vermögensseite und zeigt, wie das Vermögen zur Deckung leistungsorientierter Zusagen zur betrieblichen Altersversorgung unter Einbezug der Unternehmensperspektive mit Hilfe dynamischer Risikonebenbedingungen geeignet angelegt werden kann.

Die vorliegende Arbeit behandelt die Anlage von Pensionsvermögen im Rahmen von Contractual Trust Arrangements. Es wird untersucht, welche Anlagestrategien sich unter Berücksichtigung bilanzieller, verpflichtungs- und vermögensseitiger Rahmenbedingungen zur Anlage von Pensionsvermögen eignen. Anhand eines geeigneten Anlagemodells für Pensionsvermögen und der Durchführung einer stochastischen Simulation wird analysiert, welchen Einfluss unterschiedliche Anlagestrategien auf die Entwicklung des Pensionsvermögens haben. Die Arbeit geht zunächst auf den Hintergrund der betrieblichen Altersversorgung und Contractual Trust Arrangements in Deutschland ein. Zur Abbildung der Verpflichtungsseite und der Mitarbeiterstruktur des Unternehmens wird unter Einbezug aktuarischer Ansätze ein Mitarbeitermodell entwickelt. Das in der Arbeit entwickelte Portfoliomodell integriert die Verpflichtungs- und Vermögensseite und zeigt, wie das Vermögen zur Deckung leistungsorientierter Zusagen zur betrieblichen Altersversorgung unter Einbezug der Unternehmensperspektive mit Hilfe dynamischer Risikonebenbedingungen geeignet angelegt werden kann.

"Submitted in partial fulfillment of the requirements for the degree of Master of Business Administration from the Naval Postgraduate School, June 2009." / Advisor(s): Henderson, David R. ; Eitelberg, Mark J. "June 2009." "MBA professional report"--Cover. Description based on title screen as viewed on July 14, 2009. Author(s) subject terms: Military Retirement, Retirement Information Sources, Retirement Information Systems, General Military Training, Military Compensation, Defined Benefit Plan, Defined Contribution Plan, Military Pension, Military Retirement Fund, and Military Retirement Communication Modes. Includes bibliographical references (p. 73-74). Also available in print.

A previdência complementar é um importante instrumento para a complementação de renda na aposentadoria e configura-se como benefício atrativo às carreiras que as provêm. Pela própria natureza, geralmente produz efeitos a longo prazo e demanda avaliação atuarial para a determinação da saúde financeira dos planos, utilizando-se, para tal, de premissas aderentes às características econômicas e biográficas da população alvo. A presente dissertação procura, a partir da premissa taxa de desconto, apresentar as variações da obrigação atuarial frente ao nível da taxa de juros, principalmente quando aplicada a um cenário de oscilação relevante desta última. Procura-se identificar a pertinência da variação de uma obrigação de longo prazo em virtude de uma premissa que varia no curto prazo. O estudo foca os reflexos nas patrocinadoras de benefícios pós-emprego com características de benefício definido de previdência privada fechada, conforme normativos emitidos pelo IASB (International Accounting Standards Board), CPC (Comitê de Pronunciamentos Contábeis) e CVM (Comissão de Valores Mobiliários). / The complementary pension is an important tool for supplementary income in retirement and appears as attractive benefit to careers that offer. Generally produces long-term effects and demand actuarial valuation to determine the financial health of the plans, using up to this end, economic assumptions and biographical characteristics of the target population. This dissertation seeks from the discount rate assumption, demonstrate the variations of actuarial liabilities against the level of interest rates, especially when applied to a relevant oscillation scenario. Seek to identify the relevance of changes in a long-term obligation by virtue of a premise that varies in the short term. The study focuses on the reflex in the sponsors of postemployment benefits with defined benefit characteristics of closed pension, conform regulations issued by the IASB (International Accounting Standards Board), CPC (Accounting Pronouncements Committee) and CVM (Brazilian Securities Commission).