Fundamentals of Private Pensions

For more than five decades, Fundamentals of Private Pensions has been the most authoritative text and reference book on retirement plans in the United States. The ninth edition is completely updated and reflects recent developments in retirement plans including the passage of the US Pension Protection Act of 2006 (PPA), the widespread shift toward hybrid and defined contribution plans, and a burgeoning economics and finance research literature on retirement and retirement plans. The volume is organized into eight main sections so the reader may use the volume as a text, a research tool, or a general reference.

Section I (Chapter 1) introduces the historical evolution of the pension movement and the underlying forces that shaped its progress. Section II (Chapters 2 and 3) explains how employer-provided pensions fit into the patchwork of the U.S. retirement income security system, especially Social Security. The section also includes a discussion of the economics of tax incentives and their effect on retirement plan offerings and the structure of the benefits provided. Section III (Chapters 4 through 9) lays out the economic role of retirement plans--their design, workforce incentives, plan finances, production of adequate retirement income, possibilities for phased retirement, and the risk of outliving pension assets. Section IV (Chapters 10 through 13) examines the various forms of defined benefit and defined contribution plans, including hybrid plans, in terms of their structure, requirements, and operations. Section V (Chapters 14 through 20) lays out the regulatory environment in which plans operate; this extensive material has been especially updated to reflect PPA, and the reams of associated guidance and implementing regulations. Section VI (Chapters 21 through 25) explores the funding and accounting rules under which private defined benefit plans operate; this section also reflects the new PPA rules. The penultimate section (Chapters 26 through 28) includes a complete revamping of chapters on risk management and investments applicable to retirement plans. The section describes modern portfolio theory and its broad implications for retirement investing, and in two separate chapters, specific implications for defined benefit and defined contribution plans. The final section (Chapter 29) concludes the text with a discussion of the future of retirement plans in the United States and around the world--a particularly timely subject in light of the extreme financial volatility experienced in 2008 and the pending retirement of the baby boom generation.