The central thesis of this paper is that defined-benefit (DB) pensions in conjunction with taxpayer-backed DB pension insurance subject pension plan participants and taxpayers to much greater financial risk than current pension funding statistics suggest. Specifically, it is shown that: (i)...

This paper shows that an uninsured fully-funded defined-benefit (DL) pension is effectively a defined-contribution (DC) pension invested in a special type of fixed-income security, one that imposes a large amount of diversifiable inflation risk on plan participants and that is apparently...

Being fair to future generations requires that Social Security be reformed in a manner that prefunds a significant share of future Social Security benefit payments. All serious reform plans have this property. Prefunding is done exclusively in the Social Security trust fund in some plans, and it...