Citations (34)



Pensions as Retirement Income Insurance

Zvi Bodie

Boston University - Department of Finance & Economics

April 1989

NBER Working Paper No. w2917

This paper develops the view that employer-sponsored pension plans are best understood as retirement income insurance for employees and from that perspective addresses a number of questions regarding the reasons for their existence, their design, and their funding and investment policies. The most important of these questions are: - Why do employers provide pension plans for their employees and why is participation usually mandatory? - Why is the defined benefit form of pension plan the dominant one rather than defined contribution? - Why are the payout options under most plans limited to life annuities? - Why are most plans integrated with Social Security? - Why don't corporate pension plans follow the extreme funding and asset allocation policies that seem to be optimal from the perspective of shareholder wealth maximization? - Why do employers often make ad hoc increases in pension benefits not strictly required under the formula in defined benefit plans? - Why don't private pensions offer inflation insurance?

Number of Pages in PDF File: 46

Open PDF in Browser Download This Paper

Date posted: June 25, 2004  

Suggested Citation

Bodie, Zvi, Pensions as Retirement Income Insurance (April 1989). NBER Working Paper No. w2917. Available at SSRN: http://ssrn.com/abstract=314629

Contact Information

Zvi Bodie (Contact Author)
Boston University - Department of Finance & Economics ( email )
United States
HOME PAGE: http://www.zvibodie.com
Feedback to SSRN

Paper statistics
Abstract Views: 1,164
Downloads: 58
Download Rank: 275,985
Citations:  34

© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollobot1 in 0.172 seconds