Underfunding of Defined Benefit Pension Plans and Benefit Guarantee Insurance: An Overview of Theory and Evidence
AbstractI review the theoretical literature on defined-benefit pension plans, particularly focusing on the issue of plan underfunding and benefit guarantee insurance schemes. Under reasonable assumptions underfunding can be an equilibrium outcome even in the absence of benefit insurance. The introduction of benefit guarantee funds was a reaction to the problem of underfunding, and I summarize the ensuing problems of moral hazard and adverse selection. I then discuss the still rather small body of empirical research on the subject and propose directions for future research.
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Bibliographic InfoArticle provided by University of Toronto Press in its journal Canadian Public Policy.
Volume (Year): 34 (2008)
Issue (Month): s1 (November)
Contact details of provider:
Postal: University of Toronto Press Journals Division 5201 Dufferin Street Toronto, Ontario, Canada M3H 5T8
Web page: http://economics.ca/cpp/
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cooper, Russell W. & Ross, Thomas W., 2001. "Pensions: theories of underfunding," Labour Economics, Elsevier, vol. 8(6), pages 667-689, December.
- David W. Wilcox, 2006. "Reforming the Defined-Benefit Pension System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(1), pages 235-304.
- Jeffrey R. Brown, 2007.
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NBER Working Papers
13438, National Bureau of Economic Research, Inc.
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- Alan L. Gustman & Thomas L. Steinmeier & Olivia Mitchell, 1994. "The role of pensions in the labor market: A survey of the literature," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 417-438, April.
- Niehaus, Gregory R., 1990. "The PBGC's flat fee schedule, moral hazard, and promised pension benefits," Journal of Banking & Finance, Elsevier, vol. 14(1), pages 55-68, March.
- Thomas Crossley & Mario Jametti, 2008.
"Pension Benefit Insurance and Pension Plan Portfolio Choice,"
Social and Economic Dimensions of an Aging Population Research Papers
237, McMaster University.
- Thomas Crossley & Mario Jametti, 2013. "Pension Benefit Insurance and Pension Plan Portfolio Choice," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 337-341, March.
- Thomas Crossley & Mario Jametti, 2008. "Pension Benefit Insurance and Pension Plan Portfolio Choice," Quantitative Studies in Economics and Population Research Reports 428, McMaster University.
- Thomas Crossley & Mario Jametti, 2008. "Pension Benefit Insurance and Pension Plan Portfolio Choice," Working Papers 2008_05, York University, Department of Economics.
- Thomas Crossley & Mario Jametti, 2008. "Pension Benefit Insurance and Pension Plan Portfolio Choice," Quaderni della facoltÃ di Scienze economiche dell'UniversitÃ di Lugano 0809, USI Università della Svizzera italiana.
- Thomas Crossley & Mario Jametti, 2008. "Pension Benefit Insurance and Pension Plan Portfolio Choice," CESifo Working Paper Series 2498, CESifo Group Munich.
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