This paper examines the characteristics of three funding strategies for pension plans and analyzes the investment strategies that complement these strategies. Although the primary focus is on defined benefit plans, which include Social Security, it also applies to employees’ defined...

Contracts paying a guaranteed minimum rate of return and a fraction of a positive excess rate, which is specified relative to a benchmark portfolio, are closely related to unit-linked life-insurance products and can be considered as alternatives to direct investment in the underlying benchmark....