A framework for enhancing the management of multi-employer pension plans


Andrews, Doug (2008) A framework for enhancing the management of multi-employer pension plans. In, 2008 Stochastic Modeling Symposium and Investment Seminar, Montreal, Canada, 01 - 02 Dec 2008. 29pp.

Download

[img] PDF (Paper 1102) - Presentation
Restricted to System admin

Download (130Kb)

Description/Abstract

The current framework in Canada in which collectively-bargained, private-sector Multi-Employer Pension Plans (“MEPPs”) operate is difficult for a number of reasons including:

The Administrator (i.e., the Trustees) has no control over the contribution flow

Industries and employers within industries are subject to economic and business cycles and employers may enter or exit the MEPP relatively easily, leaving the MEPP with long-term obligations

There is pressure to set benefits at levels that anticipate future investment returns and if such returns do not materialize as anticipated there can be severe financial implications for the plan

There are inherent conflicts of interests among classes of members such as active members who continue to be voting union members and retirees and terminated members who are no longer represented by the union
The tools available for plan management include:

Governance structure

Plan design

Investment policy

Annuity purchases

Benefit reductions
This paper builds on a previous paper entitled “Extending ERM To Multi-Employer Pension Plans” which was presented at the Society of Actuaries 2006 ERM Symposium. In addition to the ideas presented in that work, it discusses the question of whether MEPPs should be subject to solvency funding rules and the viability of a pension benefit protection fund offered by the private sector. It uses techniques of stochastic modeling to assess the financial viability of such a private sector pension protection fund.

Item Type: Conference or Workshop Item (Paper)
Related URLs:
Subjects: T Technology > TA Engineering (General). Civil engineering (General)
Divisions: University Structure - Pre August 2011 > School of Mathematics > Statistics
ePrint ID: 149097
Date Deposited: 30 Apr 2010 10:37
Last Modified: 27 Mar 2014 19:08
URI: http://eprints.soton.ac.uk/id/eprint/149097

Actions (login required)

View Item View Item