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- Title
Managing Pension Costs.
- Authors
Allen Jr., Everett T.
- Abstract
It is not uncommon for pension costs to be 8–10% of payroll, with contributions to a supplemental defined contribution plan adding another 2–4%. In this paper, the author discusses the various techniques and approaches that employers can use to hold down pension costs. ways to do so include: a change in plan design, such as cutting back the rate used for future benefit accruals; increasing the degree of integration with Social Security; eliminating or reducing ancillary benefits; requiring for increasing) employee contributions to the plan; extending the average period used to determine final average payment converting a defined benefit plan to a defined contribution plan Employers can also reduce current pension contributions by changing the actuarial assumptions or actuarial cost method used in the plan; by extending the period for amortizing actuarial liabilities; and by changing the method for valuing plan assets m reflect market value to a greater degree. Finally, the author discusses employers' growing interest in recovering surplus pension plan assets by a partial or complete termination of the pension plan.
- Subjects
LABOR costs; PENSION costs; INDUSTRIAL costs; EMPLOYEE benefits; COMPENSATION management; INCOME; SOCIAL security
- Publication
Benefits Quarterly, 1985, Vol 1, Issue 1, p17
- ISSN
8756-1263
- Publication type
Article