Balancing Stability and Equity in Target Benefit Plans

Author: Chun-Ming (George) Ma

Publication date: 23-06-2025

Version: Current

Language available: Bilingual

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This paper builds on the previous foundational analysis by exploring the RM-CDC benefit adjustment mechanism in greater depth, with a focus on the accumulation phase of TBPs. We examine its impact on benefit stability and equity and address its limitations by introducing a novel adjustment mechanism. Central to this new approach is the adjustment parameter θ, which provides enhanced control over benefit payout volatility and wealth transfers across generations. Our goal is to achieve a more effective balance between stability and equity.

Categories: Research

Types: Contributed research

Topics: Pensions

Pages: 36

Format: PDF

Accession no.: 225065