Interest Rates and Pension Plans

Paper Summary:

This paper discusses private retirement plans and interest rates. The paper contends that private retirement plans will increase in importance for Americans over the coming years as a secondary source of income for retired Americans. The paper assesses that there is no direct relationship between the discount rate and the earnings of a pension plan's investments. However, the paper claims that constant fluctuations in the discount rate set forth by Congress make pension plan confidence uncertain.

Outline
Introduction
History of Discount Rates
Summary

From the Paper:

"The strength of private retirement plans must be maintained in the upcoming years due to the increasing number of Baby Boomers who will be retiring in the United States. Many retired Americans rely on private pensions and employer-sponsored retirement savings as a secondary source of income in addition to Social Security (Brinner 131). In addition, because the human life expectancy has increased dramatically over recent years, it is very important that policymakers encourage the growth of employer-sponsored retirement plans (Hungerford et al. 13)."

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