A new article co-authored by our Advisory Board Member

Manuel Garcia Huitron's new article titled: ‘Back to the funding ratio! Addressing the duration puzzle and retirement income risk of defined contribution pension plans’ has been published in the ‘Journal of Banking and Finance’. 

“The authors introduce a funding ratio measure for DC plans defined as the plan assets divided by accrued benefits derived from any given (defined) stream of contributions. The funding ratio's denominator is the present value of the total retirement income achievable if all contributions had been invested in fully amortizing fixed-income portfolios called retirement bonds. They also use the retirement bonds to introduce a class of target-income strategies that can effectively reduce income risk as retirement approaches, but also secure minimum funding ratio levels.”

To see the full article please follow the link: https://www.sciencedirect.com/science/article/abs/pii/S0378426623002479