Chapter

Retirement Guarantees in Voluntary Defined Contribution Plans

Olivia S. Mitchell and Kent Smetters

in The Pension Challenge

Published in print November 2003 | ISBN: 9780199266913
Published online August 2004 | e-ISBN: 9780191601323 | DOI: http://dx.doi.org/10.1093/0199266913.003.0012
 Retirement Guarantees in Voluntary Defined Contribution Plans

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This chapter examines the rate of return guarantee options in defined contribution (DC) plans. Guarantees in DC plans offer fixed nominal rates of return over a calendar year. Rate of return guarantees have few behavioural effects on workers, since participants do not determine investments in their pension accounts. The guarantee could affect the extent to which workers assume risk in their nonpension investments, since it makes their investments in their DC plan relatively low risk.

Keywords: rate of return guarantees; voluntary defined contribution plans; pension plans; retirement plans

Chapter.  7084 words. 

Subjects: Financial Markets

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