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Understanding Corporate Pension Plans Summary:By Edmund A. Mennis, Chester D. Clark
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. Please select one mirror to download
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