Pension regulation in Malawi: Defined benefit fund or defined contribution fund?

ABSTRACT Both the business media and the popular press have emphasized the underfunding problems associated with pension funds that are set aside for state and local government workers, a group that also includes teachers and professors at state-affiliated colleges and universities. The realization that pension funds are typically underfunded stems from the fact that the accounting standards associated with state and local government employee pension funds have led to greater transparency since 2011. This paper examines, explains, and interprets the historical development over the last 70 years of accounting standards for state and local government pension funds in the United States. Changing accounting standards, along with economic and social change, have led to consequences such as employers transforming their pension programs to avoid substantial costs and significant liabilities, for example by changing from defined benefit to defined contribution plans.

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

Journal of Pension Economics and Finance ◽

10.1017/s1474747218000434 ◽

2019 ◽

Vol 18 (04) ◽

pp. 529-548 ◽

Cited By ~ 2

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.

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Addressing Longevity Risk: How Best to Annuitize Defined Contribution Assets?

Innovation in Aging ◽

10.1093/geroni/igaa057.2395 ◽

2020 ◽

Vol 4 (Supplement_1) ◽

pp. 686-686

Author(s):

Alicia Munnell ◽

Gal Wettstein ◽

Wenliang Hou

Keyword(s):

Social Security ◽

Longevity Risk ◽

Defined Benefit ◽

Defined Contribution ◽

Economics Of Aging ◽

Distribution Rules ◽

Lifetime Income ◽

The Social ◽

Defined Benefit Pensions ◽

Deferred Annuity

Abstract Unlike defined benefit pensions, 401(k) plans provide little guidance on how to turn accumulated assets into income. The key risk that retirees face is outliving their assets. Insurance against such risk is available through several routes, including immediate annuities, deferred annuities, and additional Social Security through delayed claiming. Under this Social Security bridge option, participants would tap their 401(k) for payments equal to their Social Security to delay claiming. This paper compares these three options in simulations against a baseline in which no assets are used to obtain lifetime income. In each option, assets not allocated to purchasing lifetime income are consumed following the Required Minimum Distribution rules. The analysis finds that, when market and health shocks are included alongside longevity uncertainty, the Social Security bridge option is generally the best for households with median wealth. Wealthier households can benefit from combining the bridge option with a deferred annuity. Part of a symposium sponsored by the Economics of Aging Interest Group.

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