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dc.contributor.authorBarnow, Burt S.
dc.contributor.authorEhrenberg, Ronald G.
dc.description.abstract[Excerpt] While it is obvious that the costs of term life insurance vary directly with age, it is less obvious how employers' contributions to pension funds, which comprise a major share of nonwage compensation, vary. As such, we focus in this paper on the most common variant of pension plans and demonstrate how an employer's cost of fully funding a plan varies with the age and service characteristics of his work force. This cost, as a percent of annual salary, is seen to increase with employees' ages and, in some cases, years of service. This variation has important implications for the level and shape of life-cycle earnings profiles, for labor turnover, and for the likely impact of pension reform legislation, such as the Employees Retirement Income Security Act of 1974 (ERISA), on the well-being of workers. These implications are discussed in this paper.
dc.rightsRequired Publisher Statement: © Massachusetts Institute of Technology Press. Reprinted with permission. All rights reserved.
dc.subjectpension funds
dc.subjectdefined benefits
dc.subjectlength of service
dc.subjectnonwage compensation
dc.titleThe Costs of Defined Benefit Pension Plans and Firm Adjustments
dc.description.legacydownloadsEhrenberg19_The_Costs_of_Defined_Benefit_Plans.pdf: 1378 downloads, before Oct. 1, 2020.
local.authorAffiliationBarnow, Burt S.: United States Department of Labor
local.authorAffiliationEhrenberg, Ronald G.: Cornell University

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