Comparison of the Actuarial Model for A Normal Lumpsum Pension Plan Using Defined-Benefit and Hybrid Models of Company Employees
Abstract
In this research, we delve into the realm of pension plan programs, essential for securing a robust livelihood post-retirement through the provision of pension benefits to retired employees. Addressing the intricate balance between financial sustainability and risk mitigation, companies are mandated to allocate funds for pension benefits. The hybrid pension plan, a novel amalgamation of defined-benefit (DB) and defined-contribution (DC) features, emerges as a strategic solution to minimize the inherent risks of both models. This study undertakes the task of calculating the costs associated with pension benefits and the replacement ratio (RR) for both the traditional DB plan and the innovative hybrid pension plan. Drawing on data from 90 employees at Company X, we assume an effective interest rate of 4% for the DB plan and explore various scenarios for the hybrid plan, ranging from 3% to 5%. The findings present a compelling narrative: the costs required to fund the hybrid plan are found to be notably lower than those for the DB plan, ushering in a more economically sustainable approach. Concurrently, the RR derived from the hybrid plan surpasses that of the DB plan, showcasing its potential to provide a more substantial post-retirement income. Additionally, as the effective interest rate escalates, costs rise, and RR declines, emphasizing the sensitivity of these parameters to the interest rate. Considering these results, a conclusion emerges: the hybrid pension plan stands out as the optimal choice for employees at Company X, presenting a novel and advantageous approach to pension program design and implementation.
Keywords: Cost of pension benefits; Defined-benefit; Hybrid; Pension plan; Replacement ratio.
Abstrak
Dalam penelitian ini, kami mendalami program pensiun, yang penting untuk menjamin penghidupan yang kuat setelah pensiun melalui pemberian manfaat pensiun kepada karyawan yang pensiun. Untuk mengatasi keseimbangan rumit antara keberlanjutan finansial dan mitigasi risiko, perusahaan diwajibkan mengalokasikan dana untuk manfaat pensiun. Program pensiun hybrid, yang merupakan penggabungan fitur manfaat pasti (DB) dan iuran pasti (DC), muncul sebagai solusi strategis untuk meminimalkan risiko yang melekat pada kedua model tersebut. Studi ini menghitung biaya yang terkait dengan manfaat pensiun dan replacement ratio (RR) untuk program DB dan program pensiun hybrid. Berdasarkan data dari 90 karyawan di Perusahaan X, kami mengasumsikan tingkat bunga efektif sebesar 4% untuk program DB dan menggunakan rentang 3% hingga 5% untuk program hybrid. Hasil penelitian menemukan bahwa biaya yang diperlukan untuk mendanai program hybrid ternyata jauh lebih rendah dibandingkan dengan program DB, sehingga menghasilkan pendekatan yang lebih berkelanjutan secara ekonomi. Pada saat yang sama, RR yang diperoleh dari program hybrid melampaui program DB, sehingga menunjukkan potensinya dalam memberikan pendapatan pasca-pensiun yang lebih besar. Selain itu, ketika tingkat bunga efektif meningkat, biaya meningkat, dan RR menurun. Hal ini menekankan sensitivitas parameter-parameter ini terhadap tingkat bunga efektif. Kesimpulannya program pensiun hybrid merupakan pilihan optimal bagi karyawan di Perusahaan X, karena menghadirkan pendekatan baru dan menguntungkan dalam perancangan dan implementasi program pensiun.
Kata Kunci: Biaya manfaat pensiun; Dana pensiun; Defined-benefit; Hybrid; Replacement ratio.
2020MSC: 62P05.
Keywords
References
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DOI: 10.15408/inprime.v5i2.32741
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