scholarly journals The Decline of Defined Benefit Retirement Plans and Asset Flows

2007 ◽  
Author(s):  
James Poterba ◽  
Steven Venti ◽  
David Wise
Keyword(s):  
Defined Benefit ◽  
Retirement Plans ◽  
Asset Flows

scholarly journals Worker Choices About Payouts in Public Pensions

2017 ◽  
Author(s):  
Robert L. Clark ◽  
Janet Raye Cowell
Keyword(s):  
Local Governments ◽  
Pension Plans ◽  
Policy Implications ◽  
Empirical Literature ◽  
Defined Benefit ◽  
Retirement Plans ◽  
The Public ◽  
State And Local ◽  
State Employees ◽  
State Pension

This chapter reviews available data on the annuity choices offered to retirees who participate in defined benefit (DB) plans. DB plans are most commonly offered by state and local governments to their employees, and information on annuity options is readily available. The authors examine all state pension plans that cover general state employees and teachers, and develop a table showing the similarities and differences across these approximately eighty separate state retirement plans. The authors determine the proportion of retirees selecting each of the annuity options. Where possible, annuity options in the public sector are compared to those offered by private sector employers. The chapter also reviews the empirical literature on who chooses the various annuity options offered in DB plans. Finally, the authors consider the policy implications of plan design and how this affects the types of annuities offered to retirees.

Retirement and Pensions in American Economic History

2018 ◽  
pp. 354-374
Author(s):  
Robert Clark ◽  
Lee A. Craig
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Economic History ◽  
Pension Plans ◽  
Federal State ◽  
Defined Benefit ◽  
Retirement Plans ◽  
The Us ◽  
Defined Benefit Plans ◽  
State And Local

The proportion of the US population that survives to retirement age has increased over time, as has the share of the older population that retires. Higher incomes at older ages explain the increase in the incidence of retirement. Pensions provide much of that income. In general, public-sector workers, especially military personnel, were covered by pensions before their private-sector counterparts, and coverage in the public sector remains more widespread, and generous, than it is in the private sector. Public-sector pension plans are more likely to be defined benefit plans than are private-sector plans. Many public-sector employers have promised their employees more in benefits than they have set aside to pay for those benefits. Estimates suggest that the federal, state, and local retirement plans currently in operation are underfunded by as much as $5 trillion.

scholarly journals Use of Advisors and Retirement Plan Performance

2020 ◽  
Vol 31 (2) ◽  
pp. 342-356
Author(s):  
Rui Yao ◽  
Weipeng Wu ◽  
Cody Mendenhall
Keyword(s):  
Portfolio Allocation ◽  
Objective Measures ◽  
Retirement Savings ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Retirement Plans ◽  
Cross Sectional ◽  
Retirement Plan ◽  
Research Gap

As defined contribution (DC) plans become more popular than defined benefit (DB) plans, American workers are increasingly responsible for their retirement savings. Because retirement plan participants' portfolio allocation is constrained by the available funds in the plan, the construction of a plan's investment menu has become extremely important. No research has evaluated fund selection in retirement plans or compared plans involving an advisor with self-directed plans. To fill this research gap, this study employs cross-sectional, nationwide data that include 5,570 retirement plans with 100 or more participants in 2013, 2014 and 2015. Results show that in most cases, using advisors is not related to plan performance. Plan sponsors should require advisors to periodically evaluate the performance of plans under their management using objective measures.

Why are US men retiring later?

2018 ◽  
Vol 19 (3) ◽  
pp. 442-457
Author(s):  
Wenliang Hou ◽  
Alicia Munnell ◽  
Geoffrey Todd Sanzenbacher ◽  
Yinji Li
Keyword(s):  
Social Security ◽  
Structural Model ◽  
Retirement Age ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Retirement Plans ◽  
Original Cohort ◽  
The Past ◽  
Retirement Timing ◽  
Retirement Study

AbstractOver the past two decades, the share of individuals claiming Social Security at the Early Eligibility Age has dropped and the average retirement age has increased. At the same time, Social Security rules have changed substantially, employer-sponsored retirement plans have shifted from defined benefit (DB) to defined contribution (DC), health has improved, and mortality has decreased. In theory, all of these changes could lead to a trend toward later claiming. Disentangling the effect of any one change is difficult because they have been occurring simultaneously. This paper uses the Gustman and Steinmeier structural model of retirement timing to investigate which of these changes matter most by simulating their effects on the original cohort (1931–1941) of the Health and Retirement Study (HRS). The predicted behavior is then compared with the actual retirements of the Early Boomer cohort (1948–1953) to see how much of the later cohort's delayed claiming and retirement can be explained by these changes. The Early Boomer cohort was less likely to be fully retired than the HRS cohort at both age 62 (36.7% vs. 44.0%) and age 64 (49.5% vs. 53.9%). The model suggests that the shift from DB toward DC plans was the biggest contributor to these declines, followed by better health. Social Security rules and improvements in mortality played smaller roles.

Financial Advice, Plan Choice, and Retirement Plan Satisfaction

2020 ◽  
pp. JFCP-18-00050
Author(s):  
Michael P. Ryan ◽  
Brenda J. Cude
Keyword(s):  
Risk Tolerance ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Retirement Plans ◽  
Retirement Plan ◽  
Defined Contribution Plans ◽  
Plan Choice ◽  
Public Sector Employees ◽  
Selection Of

Most private sector employees have access to defined contribution retirement plans while public sector employees often may choose defined benefit or defined contribution plans. This research utilized a survey of faculty to analyze retirement plan satisfaction. Advice from a financial planner was positively associated with satisfaction with portability. Retirement plan knowledge was negatively associated with satisfaction on the decision period. Selection of a defined benefit plan was positively related to four aspects of satisfaction and negatively related to regret. Financial planners assisting individuals who face such choices should acknowledge the decision's challenges and evaluate the client's level of retirement planning knowledge. Focusing on long-term goals and the client's investment and mobility risk tolerance may be helpful, especially after market corrections.

scholarly journals Retirement And Estate Planning With An Emphasis On Individual Retirement Accounts

2012 ◽  
Vol 10 (7) ◽  
pp. 397
Author(s):  
Johnny Fryar, Jr. ◽  
Joe Warther ◽  
Todd Thibodeau ◽  
Meyer Drucker
Keyword(s):  
Financial Planning ◽  
International Market ◽  
Pension Plans ◽  
Defined Benefit ◽  
Retirement Plans ◽  
Market Place ◽  
Estate Planning ◽  
Earned Income ◽  
Individual Retirement Accounts ◽  
Retirement Accounts

Tax sheltering earned income for use in later years has become the cornerstone of many taxpayers retirement plans since so many companies have dropped their defined benefit pension plans in order to remain competitive in todays international market place. Many taxpayers are utilizing Traditional IRAs, Roth IRAs and designated Roth accounts as important financial planning tools when the other plans are not readily available or no longer useful for their situations.

Behavioral effects of employer-sponsored retirement plans

2007 ◽  
Vol 6 (3) ◽  
pp. 251-285 ◽  
Author(s):  
STEVEN A. NYCE
Keyword(s):  
Perceived Value ◽  
Selection Effect ◽  
Employee Commitment ◽  
Pension Plan ◽  
Behavioral Effects ◽  
Independent Effect ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Retirement Plans ◽  
Attitude Survey

AbstractMany organizations have either already terminated their defined benefit (DB) plans or are thinking about it, in order to offload the financial and regulatory risks these programs pose. But plan sponsors should think carefully about how their decision might affect their workers' commitment and productivity – and ultimately their organization's success.To answer those and other retirement questions, Watson Wyatt set out to learn how DB and defined contribution (DC) plans affect employees' workforce behavior and decisions. Watson Wyatt's Retirement Attitude Survey (WWRAS) found that, while most workers value both types of plans very highly, workers with DB plans generally appreciate their retirement programs significantly more than those with only a DC plan. This was particularly the case for those with a hybrid pension plan. This analysis found that retirement plan generosity and effective communication strongly affect a plan's perceived value to employees. This has important implications for plan sponsors, since greater plan appreciation is strongly linked to employee commitment. In fact, we found that workers covered by a defined benefit plan express a very strong commitment to their current employer, while DC plan coverage has no effect on employee commitment. This is partly owing to a selection effect, whereby firms with DB plans tend to attract more committed workers. However, even after controlling for the selection effect, DB plans exert an independent effect on the likelihood that employees will stay with their employer.

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