This paper explores the optimal degree of funding of public sector pension plans. It is assumed that a benevolent … intergenerational redistribution (i.e. whether the current generation of tax payers is willing and capable to prefund the pension …

This paper explores the optimal degree of funding of public sector pension plans. It is assumed that a benevolent … intergenerational redistribution (i.e. whether the current generation of tax payers is willing and capable to prefund the pension …

pension plan. The paper uses a traditional actuarial approach of discounting liabilities using the expected return of the … associated pension fund. A stochastic Excel model was developed to simulate the effect of varying investment returns on a pension …, and variations in asset allocation. A 50% gainsharing feature can reduce the discount rate for a defined benefit pension …