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Identifier to cite or link to this item: https://hdl.handle.net/10086/14133

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Title
Reinventing the Risk Sharing Mechanism of Defined Benefit Pension Plans
Creator
Creator Name
Shimizu, Nobuhiro Shimizu, Nobuhiro
清水, 信広 清水, 信広
シミズ, ノブヒロ シミズ, ノブヒロ
Affiliation
Affiliation Name
Government Pension Investment Fund (Japan)
Editor
Contributor Name
世代間問題研究プロジェクト（世代間問題の経済分析） = Economic Analysis of Intergenerational Issues, Project on Intergenerational Equity
Key Word
Ring-fenced DB plan
Retrospective DB plan
Sequential plan
Combination plan
Collective DC plan
DC conversion
Abstract
In this paper, I will introduce several new mechanisms of risk sharing regarding occupational retirement provisions, based on the analysis of present risk sharing between sponsoring employers and plan participants, individual participants and participants as a group, active members and beneficiaries (including deferred members), etc. Among others, I will introduce "Ring-fenced" DB (RfDB) plans, which introduce "share" structure into contributions and reserves, prohibit "lending" from active members to beneficiaries when the plan is in an underfunded status (actuarial deficiency), and allow temporary benefit reductions within prescribed ranges according to the funding level. The risk active members bear will be eased in RfDB plans, and market interest risk sponsoring employers bear will also be eased, because some portion of benefits becomes conditional. RfDB plans allow investments with greater risk tolerance, which may benefit both labor and management from a long-term perspective. It will also be possible to ease funding rules substantially for RfDB plans. It is said that DB plans are on the verge of extinction mainly by the threats from accounting standards. Taking this into account, it is necessary to expand the variation of risk sharing mechanisms in occupational retirement provisions.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2007-01
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion Paper ; No. 304
Relation
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/pie/stage2/Japanese/
NCID
AA11851730
Number of Pages
37
Sponsorship
科学研究費補助金（特別推進研究） = Grant-in-Aid for Specially Promoted Research
Appears in Collections
Discussion paper / Economic Analysis of Intergenerational Issues, PIE
URL
https://hdl.handle.net/10086/14133