Defined benefit (DB) pension plans create promises of future benefit payments that are secure only if they are sustainable. This article addresses:
The article provides a sample sustainability checklist as a qualitative tool that can be used to facilitate discussions with public employee retirement systems related to sustainability and potential risks.
The Social Security program is an important part of retirement planning for almost all Americans. This article includes: 1) background information; 2) Social Security benefit calculations; 3) funding of Social Security benefits and the current funding status of the Old Age and Survivors Insurance Fund (OASI) and the Disability Insurance Fund (DI) (or “OASDI”); and 4) potential changes to OASDI to address solvency issues.
A pension plan’s funding policy is a systematic set of procedures for determining the annual employer contributions in a specific year or series of years. This article discusses: 1) a funding policy; 2) core elements of a funding policy; 3) steps to develop a funding policy; 4) events and timeframes to review the existing funding policy; and 5) pension risks to be identified and monitored.