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Essay / Research Paper Abstract
A 10 page paper that explains the types of pension/retirement programs offered by insurance companies, what they are, how they work, eligibility for them, and benefits distribution options. The writer also discusses what insurance companies need to do if they want to capture a greater proportion of the pension business industry. Bibliography lists 5 sources.
Page Count:
10 pages (~225 words per page)
File: MM12_PGinsret.rtf
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Unformatted sample text from the term paper:
hold 90 percent of the insurance pension business (Merolli, 1998). That is not 90 percent of the pension business but rather, 90 percent of the business that is held by
insurance companies. Insurance companies offer two basic types of pension plans: 1. Defined Benefit Plan - this is usually funded totally by the company. Retirement benefits are based on
how long the individual has worked for the company and their salary. Benefits are very often calculated as a percentage of the persons salary prior to retirement (ACLI, 2001).
2. Defined Contribution Plan - this is funded through contributions from both employee and employer. Retirement benefits are then based on the sum of contributions and on the earnings
on those contributions over the years (ACLI, 2001). As with anything, there are both advantages and disadvantages associated with each plan. With the defined benefit plan, the employer bears
the risks associated with investments. With this plan, the federal government guarantees benefits. A distinct disadvantage for the employee is that if he or she changes companies, they may not
reap any benefit from the companys retirement plan. It would depend on how many years of employment they have (ACLI, 2001). With the defined contribution plan, employees share in
the risks associated with investments but they also have greater control over how and where the funds are invested. An advantage for the employee is in changing jobs. If the
person changes jobs, the retirement plan goes with them. Some of the defined contribution plans allow the employee to determine how much to allocate to different kinds of investments.
It has to do with risk and age. For instance, a younger person who has a lot of years left to work can afford to allocate more funds in high
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