Defined Contribution Retirement Plans Research Articles

Compensation Supplements and the Use of Incentive Pay in US Job Markets

The firm's interest in monitoring and/or motivating workers appears to be an important reason why firms use pay supplements such as bonuses and overtime work. In this paper, I used a representative sample of U.S. private industry jobs to obtain some indirect evidence on what pay supplements may play a role as an incentive instrument. I studied how various pay supplements differ when traditional incentive pay - pay based on individual results such as piece rates or sales commissions - is a part of job earnings; I argue that the marginal benefit to use of a pay supplement as an incentive instrument should fall when incentive pay is used. As expected, bonuses not based on individual results and use of overtime work were both found to be lower when incentive pay is used on the job. However, I also found that expected hours of holiday/vacation leave and employer spending on defined contribution retirement plans were lower with use of incentive pay. These results are contrasted with union-nonunion differences in pay supplements, updating Freeman's 1981 results. The paper also discusses the role that incentive pay and collective bargaining play in accommodating differences in worker preferences in the job market.

Tuition Rising: Why College Costs So Much

Preface I. Setting the Stage 1. Why Do Costs Keep Rising at Selective Private Colleges and Universities? 2. Who Is in Charge of the University? II. Wealth and the Quest for Prestige 3. Endowment Policies, Development Policies, and the Color of Money 4. Undergraduate and Graduate Program Rankings 5. Admissions and Financial Aid Policies III. The Primacy of Science Over Economics 6. Why Relative Prices Don't Matter 7. Staying on the Cutting Edge in Science IV. The Faculty 8. Salaries 9. Tenure and the End of Mandatory Retirement V. Space 10. Deferred Maintenance, Space Planning, and Imperfect Information 11. The Costs of Space VI. Academic and Administrative Issues 12. Internal Transfer Prices 13. Enrollment Management 14. Information Technology, Libraries, and Distance Learning VII. The Nonacademic Infrastructure 15. Parking and Transportation 16. Cooling Systems VIII. Student Life 17. Intercollegiate Athletics and Gender Equity 18. Dining and Housing IX. Conclusion 19. Looking to the Future 20. A Final Thought Appendix. Defined Benefit and Defined Contribution Retirement Plans Notes Acknowledgments Index

The decision to defer: factors affecting employee deferral incentives

The purpose of this study is to examine employee participation and contribution incentives among defined contribution retirement plans. Using data from the 1995 Survey of Consumer Finances, probit and tobit analysis indicates no significant relationship between employer contributions and an employee’s decision to make contributions into his or her retirement plan. However, of those employees who are contributing to their pension plans, the employer contribution percentage has a significant positive effect on employee contribution rates. Therefore, the findings support our hypothesis of a direct relationship between the average employee deferral percentage and the existence of an employer matching contribution.

Defined benefit versus defined contribution pension plans: How are the interests of employees and the public best served?

Prior to the enactment of the Employee Retirement Income Security Act of 1974 the rate of formation of defined benefit retirement plans exceeded the rate of formation of defined contribution retirement plans. Following its enactment the trend has been reversed. This article reviews the development of public policy with respect to privately sponsored retirement benefits, takes note of the legislatively mandated regulatory distinctions between defined benefit and defined contribution plans, outlines the distinctions between the plans from the perspective of plan sponsors versus plan participants, and questions the appropriateness of the movement away from defined benefit plans in terms of public policy objectives regarding retirement income security.

Building a Better Retirement

university employees participate in what is known as a defined contribution retirement plan. Such plans are often described as because they call upon employees to direct or manage their own retirement accounts. Because of the range of investment possibilities and their different levels of risk and return, these decisions can profoundly affect one's quality of life in retirement. Private industry is following the lead of institutions of higher education in moving away from old-style plans that guarantee employees a certain amount of annual payment in retirement. Under new plans similar to TIAA/CREF, there is no retirement income guarantee. What one receives will depend upon how well the investments in each personal retirement account perform. There are advantages and disadvantages to the self-directed approach for both employees and employers. The employees are fully vested, meaning they hold title to the fund assets. If employees change jobs, the funds remain invested in their names. Should the employer run into financial trouble, the employees' retirement funds are safe. If the employees are astute in investing, they may enjoy a richer retirement than that offered by a typical company-managed fund. For the