DC DB Plan<br>
early termination<br>investing risk is borne by ...<br>once vested, retirement assets are readily portable<br>
risk obj：min surplus vol<br> min shortfall risk<br>
pension surplus,<br>company profitability<br>pension plan is closed to new participants (low duration, more liq needs)<br>ratio of inactive/active plan mambers<br>inflation indexing
time horizon: going concern or terminated plan<br>Law: most countries federally regulate pension plans<br>tax: exempt<br>
随便句子归类
DB DC plan<br>
fund pension obligations<br>
minimize future pension obligations, and maintain or increase future pension income<br>
early retirement/lump sum: increases immediate liq requirement and reduce r tolerance<br>
Foundation Endowments<br>
return： perpetual support and preservation of purchasing power<br>return requirement = required payout + expected π + fund expenses<br>
risk：<br>* spending rate high<br>* heavy reliance upon donations (10%+)<br>* greater budget dependency<br>* no spending rule in place<br>* smaller size ofendowment<br><br>Risk obj:<br>more fluid, creative and aggresive than pension funds;<br>above-avg ---> no contractually defined liability and long time horizon<br>
***'s x% annual spending requirement is not a contractual obligation
time horizon: perpetuity<br>
legal: prudent investor rule generally applies<br>
tax: non taxable <font color="#f15a23">except Unrelated Business Income (UBIT)</font><br>
Unique： concentrated holdings, socially responsible investing<br>
the use of a simple spending (absence of smoothing rule:less tolerance for ST ptf risk.<br>
simple spending rule 波动大<br>rolling 3-year avg spending rule: extraordinary 还是会有影响<br>geometric spending rule: 克服 <br>
** has a spending rule that is smoothed over a three year period, that will decrease volatility in spending requirements, allowing ** to assume higher risk tolerance.
life insurance<br>
return: min return based on mortality rates<br>enhanced margin: spread mng above credited rates<br>surplus: taxable<br>
risk: surplus write-down (tolerance low)<br> reinvestment risk<br> CF vol<br> credit risk<br>
liq: disintermediation: i 升 D(liability)降 A-L mismatch<br> asset marketability risk<br>needing<font color="#f15a23"> minimal liq</font> becoz the LT nature of L<br>
legal:<br>* eligible investments<br>* prudent investor rule<br>* valuation methods is mandated by the NAIC<br>
tax: not taxed (except surplus transferred)<br>
Uniqure: concentration of product offerings: company size, and level of surplus<br>
non-life insurance<br>
return: greater uncertainty, not interest rate sensitive (no periodic payment required)<br>
risk: limited tolerances<br>* due to the relatively high uncertainty associated with calims<br>* the CF characteristics of non-life companies are often <font color="#f15a23">erratic and unpredictable</font><br>
liq： high --> given the uncertainty of CFs<br>
time: shorter than life-ins companies<br>
legal: risk-based capital requiements (RBC) have been established<br>
tax: taxable<br>
unique: the current fin status of nonlife ins companies, coupled with managing investment risk and liq requirements<br>
banks
return: earn positive interest spread<br>
RISKL ALM below avg<br>
liq: deposit withdrawals<br> demand for loans as well a<font color="#f15a23">s regulation</font><br>
time: short to intermediate term (most bank L are ST)<br>
legal: highly regulated<br>
taxable
