COMPARING THE EFFECTIVENESS AND BENEFITS OF EMPLOYER SPONSORED RETIREMENT PLANS IN THE UNITED STATES
Open Access
Author:
Frederick, Ethan S
Area of Honors:
Risk Management
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Ron Gebhardtsbauer, Thesis Supervisor Ron Gebhardtsbauer, Thesis Honors Advisor Nan Zhu, Faculty Reader
Keywords:
Actuarial Science Retirement Pensions 401(k)
Abstract:
This research analyzed the ability of employer sponsored retirement plans to meet the financial needs of retirees throughout retirement. It attempted to compare the strengths and weaknesses of defined benefit and defined contribution plans to employees and employers from a financial and human capital perspective. Utilizing historical data on essential financial performance factors, such as returns on bonds and securities and inflation, as well as plan type performance, underlying assumptions on the transition from different states were created as the foundation of a predictive model. This model was then used to simulate retirement plan performance and assess them based on successfully funding retirements. Finally, the results of simulations were evaluated and translated to communicate the value of the different plans to different stakeholders and provided insight into what type of retirement plan might be most advantageous for an employer to offer or for an employee to seek in employment.
