Pension Liabilities: Fear Tactics and Serious Policy
AbstractThis working paper argues that pension funds should adopt a funding principle that is consistent with a return on holdings conditional on the state of the stock market. As will be shown, the expected “conditional rate of return” used in making this assessment will vary depending on the current ratio of stock prices to trend corporate earnings. This funding rule will lead to a more even flow of contributions into the fund than a rule that is based on a fixed return for assets over time.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2012-02.
Length: 22 pages
Date of creation: Jan 2012
Date of revision:
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Find related papers by JEL classification:
- G - Financial Economics
- G2 - Financial Economics - - Financial Institutions and Services
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- J - Labor and Demographic Economics
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-02-27 (Economics of Ageing)
- NEP-ALL-2012-02-27 (All new papers)
- NEP-PKE-2012-02-27 (Post Keynesian Economics)
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