2005 Symposium: The Evolution of Risk and Reward Sharing in Retirement

April 25-26, 2005

About the Conference

Retirement systems unavoidably balance a variety of economic and political risks, including capital market and mortality shocks, firm bankruptcy risks, funding changes, and policy shifts. These are in turn reapportioned among various stakeholders. This conference analyzed how recent changes in risk and reward patterns are being shared among the parties to private and public retirement systems. Discussion assessed how these risk sharing arrangements are evolving and should continue to change in the future.

The 2005 Symposium was a Wharton Impact Conference sponsored by the Wharton School’s Pension Research Council and Boettner Center for Pensions and Retirement Research.

Co-organized by David Blitzstein, Olivia S. Mitchell and Steve Utkus.

Conference Agenda

APRIL 25, 2005

Opening Remarks: Olivia Mitchell
David Blitzstein, UFWC: “Did Pensions Take a Wrong Turn?

Session I: Plan Sponsor Perspectives on Plan Risks and Rewards

  • P. Brett Hammond and Doug Fore, TIAA-CREF: “New Views of Defined Benefit Plans: Risks and Rewards for Plan Sponsors (presentation slides available here, paper available here)
  • Julia Coronado, Watson Wyatt, Nellie Liang, Federal Reserve Board of Governors: “The Influence of PBGC Insurance on Pension Fund Finances” (paper available here)

Session II: Controlling Plan Sponsor Risks and Rewards

  • Emily Kessler, SOA: “Changing Views of Pension Risk Management: New Actuarial Perspective” (presentation slides available here)
  • Peter Albrecht, Univ. of Mannheim; Raimond Maurer, Univ. of Frankfurt; Joachim Coche, European Central Bank; Ralph Rogalla, Univ. of Frankfurt: “Optimal Investment Strategies for Hybrid Pension Plans – Analyzing the Perspective of Sponsors and Members” (paper available here)

Session III: Employee Perspectives Regarding Risk and Reward

  • Phyllis Borzi, GW: “Changing Pension Risks Confronting Participants” (presentation slides available here, paper available here)
  • Sarah Holden, ICI and Jack Vanderhei, EBRI/Temple: “Saving Adequacy in the DC Context” (paper available here)

Session IV: Strategies for Containing Retirement Risk

  • Olivia Mitchell and Stella Yang, Wharton; Steve Utkus, Vanguard: “Better Plans for the Better-Paid: Determinants and Effects of 401(k) Plan Design” (presentation slides available here, paper available here)
  • Ronald Albahary, SEI Investments and Joseph Miskel, Merrill Lynch Retirement: “New Investment Strategies for a Defined Contribution Pension Environment” (presentation slides available here)
  • Brian Fuller, George Wagoner, Frank Yeager, Mercer; Anna Rappaport, Independent Consultant: “Changing Dynamics and Risk Sharing in Employer-Provided Retiree Medical Benefits” (presentation slides available here, paper available here)

Discussant: Lori Lucas, Hewitt Associates LLC (presentation slides available here)

APRIL 26, 2005

Session V: Pension Risks and Rewards: Public Sector Perspectives

  • Henning Bohn, University of California Santa Barbara: “Who Bears What Risk? An Intergenerational Perspective”
    (presentation slides available here, paper available here)
  • Anthony Neuberger, Warwick Business School, and David McCarthy, Imperial College: “The UK Approach to Insuring Defined Benefit Plans” (paper available here)
  • Salvador Valdés-Prieto, Universidad Católica de Chile: “Avoiding Transition Costs in Reforms to Social Security” (paper available here)
  • Neal McCall, Mark Warshawsky, and John D. Worth, Department of the Treasury: “A Modern Approach to Single Employer Defined Benefit Pension Regulation: Motivations for the Administration’s Pension Reform Proposal” (paper available here)

Discussant: Kent Smetters, Wharton

Session VI: Roundtable

Mary Nell Billings, Federal Express; Daniel Madden, Illinois Tool Works; James F. Moore, PIMCO

Closing Remarks: Olivia Mitchell