Tag: Risky Pensions
Abstract Recent defined benefit (DB) pension freezes in large healthy firms such as Verizon and IBM, as well as terminations of plans in the struggling steel and airline industries, highlight the fact that these traditional pensions cannot be viewed as risk-free promises from the employee’s perspective. In this paper we develop an empirical dynamic programming…
Introduction In response to the perfect storm of falling stock returns and interest rates that hit pension funds in 2000, many companies in the United States and the United Kingdom have shifted from defined benefit (DB) to defined contribution (DC) schemes. In contrast, Dutch pension plans have mainly preserved their defined benefit character in recent…
