Balance Plans Research Articles

Optimal Choice between Defined Contribution and Cash Balance Pension Schemes: Balancing Interests of Employers and Workers

In the context of pension plans, the employer and the worker have distinct interests and face different risks. The worker seeks higher retirement benefits, while the employer aims to minimize the cost of fulfilling his obligations. To address these diverse needs, the defined contribution plan managed with participating life insurance (DC-PL) and the cash balance plan managed with unit-linked insurance (CB-UL) serve as suitable choices. The multi-criteria analysis is conducted using the cumulative prospect theory model to measure the utility of the parties involved toward a mixed product combining these two pension plans. By assigning weights to risk measures and maximizing utilities, the paper employs both additive utility and Nash equilibrium approaches. The results reveal that the CB-UL plan aligns with employers’ interests, offering potential financial gains, while the DC-PL plan attracts workers due to its profit-sharing aspect. Significantly, when equal importance is given to both parties, the CB-UL plan emerges as the prevailing choice. This study contributes to the understanding of pension plan design and decision-making dynamics between employers and workers, providing valuable insights for achieving a balance between retirement benefits and cost management.

Valuing Losses of Pension Benefits

Valuing Losses of Pension Benefits

Reforming Teacher Pension Plans: The Case of Kansas, the First Teacher Cash Balance Plan

Abstract The ongoing crisis in teacher pension funding has led states to consider various reforms in plan design to replace the traditional benefit formulas, based on years of service and final average salary (FAS). One such design is a cash balance (CB) plan, long deployed in the private sector, and increasingly considered, but rarely yet adopted, for teachers. Such plans are structured with individual 401(k)-type retirement accounts, but with guaranteed returns. In this paper I examine how the nation's first CB plan for teachers, in Kansas, has played out for system costs, and the level and distribution of individual benefits, compared with the FAS plan it replaced. My key findings are: (1) employer-funded benefits were modestly reduced, despite the surface appearance of more generous employer contribution matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially. In addition, benefits are more equitably distributed between short-term teachers and career teachers than under the back-loaded structure of benefits characteristic of FAS plans. The key to the plan's cost reduction is that the guaranteed return approximates a low-risk market return, considerably lower than the assumed return on risky assets.

An evolutionary optimization algorithm for proton arc therapy

Objective. Proton arc plan normally contains thousands of spot numbers and hundreds of energy layers. A recent study reported that the beam delivery time (BDT) is proportional to the spot numbers. Thus, it is critical to find an optimal plan with a fast delivery speed while maintaining a good plan quality. Thus, we developed a novel evolutionary algorithm to directly search for the optimal spot sparsity solution to balance plan quality and BDT. Approach. The planning platform included a plan quality objective, a generator, and a selector. The generator is based on trust-region-reflective solver. A selector was designed to filter or add the spot according to the expected spot number, based on the user’s input of BDT. The generator and selector are used alternatively to optimize a spot sparsity solution. Three clinical cases’ CT and structure datasets, e.g. brain, lung, and liver cancer, were used for testing purposes. A series of user-defined BDTs from 15 to 250 s were used as direct inputs. The relationship between the plan’s cost function value and BDT was evaluated in these three cases. Main results. The evolutionary algorithm could optimize a proton arc plan based on clinical user input BDT directly. The plan quality remains optimal in the brain, lung, and liver cases until the BDT was shorter than 25 s, 50 s and 100 s, respectively. The plan quality degraded as the input delivery time became too short, indicating that the plan lacked enough spot or degree of freedom. Significance. This is the first proton arc planning framework to directly optimize plan quality with the BDT as an input for the new generation of proton therapy systems. This work paved the roadmap for implementing such new technology in a routine clinic and provided a planning platform to explore the trade-off between the BDT and plan quality.

Novel Application of OFDMA-IDMA in Modern Telecommunication System

Abstract: Alongside giving existing correspondence application in a versatile manner many new administrations have opened up which unequivocally require portable broadband access. The expansion in requests on remote applications, future frameworks need to structure new advances that help high limit and QOS. In this paper we decide the impact of a joined IDMA-OFDMA framework on execution of touch blunder rate (BER) concerning change in SNR during remote transmission for various balance plans. We have limited ISI by the cyclic prefixing method in OFDM [4], by iterative discovery with IDMA [5]. OFDMIDMA enjoys benefits of minimal expense recipient, variety against blurring and adaptable rate transformation.

The Five-Day Production Capacity Balance Plan Research of Multi-Objective and Multi-Stage Assembly Line Based on Amalgam Algorithm

The Five-Day Production Capacity Balance Plan Research of Multi-Objective and Multi-Stage Assembly Line Based on Amalgam Algorithm

From Stand-Alone Pensions to Alternative Retirement Plans: Examining State and Local Governments

Defined benefit (DB) pension plans are the dominant retirement program for state and local governments in the United States. However, in the last 15 years, some have given new employees a choice of alternatives to stand-alone DB pension plans such as cash balance (CB), defined contribution (DC), and hybrid retirement plans. This article examines this shift through survival analysis using panel data of 190 state and local pension plans across the United States. From 2001 to 2019, we modeled five change factors found in the pension reform literature, namely, financial constraints, interest group influence, plan membership, and liability, along with other state factors. Our analysis shows that all five of these factors impacted the shift to alternative retirement plans from stand-alone DB plans. Notable findings are that well-funded pensions were more likely to shift to alternative retirement plans, and interest groups such as police, fire, and teachers were more likely to keep stand-alone plans.

Hybrid Cash Balance and Pension Equity Plans: Origins and Development

It is widely recognized that there has been a massive shift from defined-benefit (DB) to defined-contribution pension plans. However, the full extent of that shift from fully functioning DB plans is generally understated. This article measures and relates the extent of that understatement and its importance for retirement income. It then discusses the increasing importance of cash balance and pension equity plans and their legality. It then conducts an in-depth discussion of large (Fortune 500) employers, small- and medium-sized employers, and then very small employers (25 or fewer active participants). It concludes that retirement income plans in the United States are far from static. Indeed, they have evolved throughout the era and will continue to do so in the future.

Work life balance and career plans of female dentist entrepreneurs

Work life balance and career plans of female dentist entrepreneurs

Equilibrium strategy of economic cost and carbon emission reduction of green electric-coal supply chain

As the government pays more attention to energy conservation and emission reduction in the energy industry, the contradiction between economic cost and carbon emission reduction in the electric-coal supply chain becomes more and more serious, which needs to be solved urgently. Therefore, based on the theory of green supply chain, this research constructs a dynamic multi-objective model under the uncertain decision-making environment with the realization of the equilibrium of the total economic cost and carbon emission of electric-coal supply chain as the decision goal, and taking the coal supply capacity and and other practical requirements as the constraints. The following equilibrium model is applied to a electric-coal supply chain in the southwestern region of Y Province. With full consideration of different carbon emission reduction scenarios, the total economic cost and carbon emission balance plan of electric-coal supply chain under five different emission reduction scenarios were obtained, which verified the practicability and effectiveness of the equilibrium model. The results show that the equilibrium model can effectively alleviate the conflict between the economic cost and carbon emission reduction. Finally, based on data analysis, we put forward management suggestions from macro, meso and micro levels to better realize the greenization of electric-coal supply chain.

Specific aspects of forecasting electrical energy losses in electricity networks

The present paper considers methods of predicting load losses under varied types of electrical energy loss characteristics. The method of forecasting electrical energy losses with the use of one-factor (planned electrical supply to network) and multi-factor (planned values of electrical supply to network, energy output from electric power stations, etc.) characteristics of power and energy losses is proposed. Static models of nodal loads and parameters of equivalent network are used. The paper substantiates the application of multi-factor characteristics for assessing electrical energy losses during regulatory period. The paper provides the solution of the system of nonlinear equations describing long-term balance plans for electrical energy and gives the results of predicting load losses of electrical energy.

Cross-Subsidization of Teacher Pension Costs: The Case of California

The value of pension benefits varies widely, by a teacher's age of entry and exit. This variation is masked by the uniform rate of annual contributions, as a percent of pay, to fund benefits for all. For the first time, we unmask that variation by calculating annual costs at the individual level. In California, we find that the value of a teacher's benefits ranges from about 4 to 22 percent of pay, and exhibits some idiosyncratic patterns, as is endemic to traditional pension plans. The variation in individual cost rates generates an extensive but hidden array of cross-subsidies, as winners receive benefits worth more than the uniform contribution rate, and losers receive less. Almost two thirds of all entering teachers, past and present, are losers in California. By contrast, a prominently invoked study finds that nearly all active teachers are winners there. That result is shown to be highly skewed by excluding the losses of prior entrants who left early, thereby violating the funding fact that the gains and losses of winners and losers must offset each other. Our main policy conclusion is that cash balance plans can rationalize or eliminate the current system of cross-subsidies and provide the transparency lacking in traditional plans.

Using the Brief-BESTest paired with a novel algorithm to provide targeted balance interventions for people with subacute stroke: a feasibility study

ABSTRACTBackground: Balance is a common mobility limitation following stroke, but determination of the most effective balance-related plan of care can be difficult due to multiple balance impairments that vary between individuals. The Brief-BESTest is a validated outcome measure for balance based on six systems of postural control. It may also be a useful tool to guide clinicians in their balance plan of care design.Objective: The objective of this study was to determine the feasibility of a quantitative balance plan of care for patients with subacute stroke, using a novel algorithm that utilizes the scoring design of the Brief-BESTest. The authors hypothesized that this plan of care could create targeted balance interventions among this population.Methods: Eligible patients with subacute stroke at an inpatient rehab facility completed the Brief-BESTest within 1 week of admission. The subjects participated in specific interventions based on test section scores during their rehab stay.Results: Five subjects completed testing and participated in targeted balance interventions, addressing three to five systems of postural control. Subjects demonstrated improved Brief-BESTest overall scores by 2, 1, 7, 4, and 6 points from admission to discharge. Improvements in section scores were primarily seen in the systems of postural control identified by the algorithm. All subjects improved in Functional Independence Measure (FIM™)30 scores for locomotion (walking and stairs) by 5, 6, 7, 6, and 9 points, respectively. All subjects were discharged to the community.Conclusion: Our observational study found this method of assessment and intervention to be feasible in the subacute stroke population and was associated with improved balance scores and improved functional mobility. Further study is warranted to determine effectiveness and efficiency.

How Do California Teachers Fare under CalSTRS? Applying Workforce Tenure Analysis and Counterfactual Benefit Modeling to Retirement Benefit Evaluation

Most public school teachers in the United States are covered by traditional defined benefit (DB) pensions designed to reward long service. Numerous recent studies, including several focused on California, use high attrition rates among new hires to argue that teachers would be better off with a defined contribution (DC) plan or a cash balance (CB) plan. These studies fail to address tenure patterns in the teaching workforce—for example, how long the average teacher currently working in the profession can expect to stay. In this study, we ask whether most teachers currently working in California public schools can expect to stay long enough to accrue higher benefits under their pension than under alternative retirement plans with the same expected cost and the same capital market assumptions. Based on an analysis of CalSTRS membership and actuarial data and our counterfactual benefit modeling, we find that 73% of teachers currently working in California can expect to work at least 20 years, and 46% can expect to work at least 30 years. At least 82% of the California teacher population will stay until age 55, the early retirement age. On an entering-cohort basis, nearly half of current new-hire teachers in California (50%) are better off with the DB pension than the idealized DC plan. Critically, 85% of California’s teaching population will accrue higher benefits under the CalSTRS DB pension than through an idealized 401(k), and 76% will accrue higher benefits than through a generous CB plan. <b>TOPICS:</b>Retirement, legal/regulatory/public policy, simulations, pension funds

Reaching an alignment of programmes of social and economic development of a region and its fuel and energy balance plan

Reaching an alignment of programmes of social and economic development of a region and its fuel and energy balance plan

Pension Plans 2014

Pension Plans 2014 discusses the popular cash balance plan, floor offset plan and cross tested plan from an actuarial viewpoint. Many retirement plan could be upgraded to take into account from a pension plan if they were understood. Contributions to these plans are made on a benefits basis as opposed to a contribution basis. The plan will favor older highly compensated employees with less time to fund for retirement. These plans are popular with professionals who understand them even though they are not as simple as a 401(k) plan.

Administering Cash Balance Pension Plans to Conform With Qualified Divorce Orders

This article provides an overview of the unique issues that normally arise under a cash balance pension plan to conform with qualified domestic relations orders (or QDRO). Presently, many plan administrators treat a cash balance plan just like a defined contribution plan only to find that the benefits within a cash balance plan are not as easily divided as those within a defined contribution plan. The apparent similarity of hypothetical account balances in a cash balance plan and the actual account balances in a 401(k) plan can result in mishandled QDROs. The similarities between a cash balance plan and a traditional defined benefit plan can also confound plan administrators, particularly when a defined benefit plan was subsequently converted to cash balance plan. Then all or a part of a participant’s benefit subject to a QDRO has the option to be determined under a traditional defined benefit formula, such as a percentage of final average pay. And while a QDRO administered under a pure cash balance plan can split the benefit in a fashion similar to that used for 401(k) plans, QDROs remain distinct and involve important differences between a cash balance plan and a 401(k) or other defined contribution plans. These unique features of a cash balance plan can drastically affect the monetary impact on alternate payees. To fulfill the duties prescribed under both ERISA and the IRC, plan administrators must engage in a very targeted fact-specific analysis involving the participant (employee), alternate payee and the Plan within a taut web of federal laws, regulations and mandates.

The electric energy potential of landfill biogas in Brazil

The increases in a country's energy capacity are related to its gross domestic product (GDP). In Brazil, increases in income and the consumption of goods and services have led to an increase in the generation of solid waste (SW), which is sent to landfills as a method of treatment and final disposal. The purpose of this study was to facilitate an increase in energy generation from renewable resources, specifically from landfills via thermal biogas plants, and the research was divided into two phases. The first phase involved the assessment of the potential population size contributing to the landfill, which could result in the installation of a financially viable enterprise to generate electricity in Brazil. Next, an estimate of the costs associated with the generation and collection of solid waste in Brazil was predicted by GDP prognoses, the latter being in accordance with the National Energy Balance (Balanço Energético Nacional – BEN) plan created by the Mines and Energy Ministry of Brazil (Ministério de Minas e Energia do Brasil – MME). The net present value (NPV) and internal rate of return (IRR) of each enterprise scenario was used in the first stage to assess the plan's financial viability. In the second stage, estimation curves such as logistics, decreasing rate of growth, and logarithmic curves were used to establish relationships between the generation scenarios and the projected collection of SW and projected GDP. Thus, a range of possible landfill biogas/methane generation values and installed energy capacities were created, considering the extreme maximum and minimum values. These values were related to the energy sources from residual fuels reported by BEN. The results demonstrated that such values still represented a small percentage (0.00020% in 2010 and 0.44496–0.81042% in 2030) of the projected energy generation from residual fuels. Thus, an urgent need was identified to formulate policies that would encourage landfills as a source of renewable energy, broadening the number of financially viable initiatives for energy generation from landfill biogas for populations of fewer than 200,000 inhabitants.

Pension Conversion, Termination, and Wealth Transfers

AbstractThis article explores the motivation to change their defined benefit pension plan by either terminating the plan and replacing it with a defined contribution plan or converting it to a cash balance plan. Using Form 5500 data as well as firm financial data, we find firms wishing to change their defined benefit plans are motivated by potential wealth transfer and tax implications. Firms terminating pension plans tend to have lower potential wealth transfers and lower taxes than firms converting to a cash balance plan, indicating a desire to modify the implicit contract instead of terminating the plan.

Cash Balance Pension Plan Conversions: An Analysis Of Motivations And Pension Costs

In recent years, many corporations have replaced their traditional defined benefit (DB) pension plans with cash balance (CB) plans, which share many of the characteristics of defined contribution plans. This study provides empirical evidence on the characteristics of CB converters and the behavior of pension costs and obligations pre- and post-conversion. We find that CB converters are larger than firms that retain traditional DB plans as well as those that terminate DB plans. They are less profitable than the former, but more profitable than the latter. CB conversions are not associated with proxies for greater labor mobility (e.g., firm-specific employee turnover rate). They are associated with a workforce that is closer to retirement, on average, lending credence to the breach of implicit contract rather than the labor market hypothesis as a motivator of CB conversions. Consistent with this intuition, we document that CB converters recognize a reduction of unrecognized prior service costs in the year of conversion, consistent with a negative plan amendment. Unlike pre-conversion, pension costs and obligations are significantly lower for CB firms post-conversion than for a matched sample of firms retaining traditional DB plans. CB conversions are more popular than DB plan terminations among firms with overfunded pension plans in periods when expected return on plan assets is likely to be high, with a consequent positive effect on reported income.