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Understanding Corporate Pension Plans

Understanding Corporate Pension Plans

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Understanding Corporate Pension Plans

Understanding Corporate Pension Plans Summary:

 
By Edmund A. Mennis, Chester D. Clark
  • Publisher:   The Financial Analysts Research Foundation (Research Foundation of CFA Institute)
  • Number Of Pages:   89
  • Publication Date:   1983-01-02
  • ISBN-10 / ASIN:   094320559X
  • ISBN-13 / EAN:   9780943205595
Finding a successful solution to the complex problem of investing
a pension fund, especially one created by a defined benefit plan,
depends upon reaching a clear understanding of the structure of
its commitments. This step, which logically precedes the definition
of investment objectives, does not come easily to an asset
manager untrained in employee benefits and actuarial science.
The purpose of this monograph is to facilitate the process of understanding
fund characteristics.
At the inception of a defined benefit plan, the assets are so small
in relation to the ultimate structure of liabilities that an asset
manager can turn directly to setting investment objectives because
plan characteristics will affect investment policies only in
the distant future. Several decades ago, most public and private
pension plans were in those early stages of development. In
contrast, today's retirement programs, under the funding requirements
of ERISA and after a long period of the maturing process,
require a full knowledge of the factors affecting future contributions
and benefit payments as they determine future asset
growth. As corporate financial officers have properly become
more concerned with pension fund management, moreover, they
expect asset managers to have a clear understanding of the full
range of factors involved.
 
 
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