Post-Retirement Adjustments in Defined Benefit Pensions

Voting on pensions with endogenous retirement age1

It is often argued that the observed trend towards early retirement is due mainly to the implicit tax imposed on continued activity of elderly workers. We study the relevance of such a distortion in a political economy model with endogenous age of retirement. The setting is a two-period overlapping generations model. Individuals di¤er in their productivity. In the ...rst period they work a ...x...

Private Pensions, Retirement Wealth and Lifetime Earnings

This paper investigates the effect of private pensions on the retirement wealth distribution. We incorporate stochastic private pension coverage into a calibrated life-cycle model with stochastic earnings. Private pensions lead to higher net worth inequality at retirement, which is closer to the inequality observed in the PSID than a model without private pensions. However, the offset effect of...

Defined Contribution Plans, Defined Benefit Plans, and the Accumulation of Retirement Wealth.

The private pension structure in the United States, once dominated by defined benefit (DB) plans, is currently divided between defined contribution (DC) and DB plans. Wealth accumulation in DC plans depends on the participant's contribution behavior and on financial market returns, while accumulation in DB plans is sensitive to a participant's labor market experience and to plan parameters. Thi...

Risky Business: The Decline of Defined Benefit Pensions and Firms' Shifting of Risk

Optimal retirement benefit guarantees

The majority of countries that switched to funded private account retirement systems opted to complement such systems with explicit guarantees to retirees and agents saving for retirement. The motivation was that a social insurance system should provide a minimum standard of living in retirement. This paper studies the optimal design of such guarantees. Particular attention is paid to moral haz...