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Good Practice Principles in Modelling Defined Contribution Pension Plans

Dowd, K. & Blake, D. (2013). Good Practice Principles in Modelling Defined Contribution Pension Plans (PI-1302). UK: Pensions Institute.


We establish 16 good practice principles in modelling defined contribution pension plans. These principles cover the following issues: model specification and calibration; modelling quantifiable uncertainty; modelling member choices; modelling member characteristics, such as occupation and gender; modelling plan charges; modelling longevity risk; modelling the post-retirement period; integrating the pre and post-retirement periods; modelling additional sources of income, such as the state pension and equity release; modelling extraneous factors, such as unemployment risk, activity rates, taxes and entitlements; scenario analysis and stress testing; periodic updating of the model and changing assumptions; and overall fitness for purpose.

Publication Type: Monograph (Discussion Paper)
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
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