Collective Defined Contribution Schemes as an Alternative to Pension Plans

Authors

DOI:

https://doi.org/10.32870/myn.vi45.7651

Keywords:

pensions, collective defined contribution, financial viability, actuarial viability

Abstract

Traditional pension plans, such as defined contribution and defined benefit, face several risks: being the most known, the increase of life expectancy. To reduce this risk, many hybrid pension plans have been proposed, to mitigate this risk. The objective of this study is to explore the financial and actuarial sustainability of a hybrid pension plan known as collective defined contribution (CDC) by accumulating a pension fund with the methodology found in Aon (2020). The results of the simulations in this study show that the replacement rate defined in the design of a CDC pension plan is reached by all the members of the plan. Moreover, through the same pension fund, deficits and gains are financed by it.  

Author Biography

Michael Demmler, Universidad Autónoma de Querétaro

http://orcid.org/0000-0002-1629-5814

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Published

2022-01-01 — Updated on 2022-01-01

How to Cite

Gómez Hernández, D., & Demmler, M. (2022). Collective Defined Contribution Schemes as an Alternative to Pension Plans. Mercados Y Negocios, (45), 5–26. https://doi.org/10.32870/myn.vi45.7651