Private Pensions and Employee Mobility - by Izzet Sahin (Hardcover)

About the Book

The author presents a new approach to the study of private pensions in the united States and Canada. Whereas traditional approaches focus on the firm as the key to analyzing pension obligations and the impact of pensions on economic processes, Sahin takes the individual worker as the unit of analysis. The evolution of costs and benefits are then determined over the work life, which may include several jobs and membership in different pension plans. The Worklife Report

Sahin presents a new approach to the study of private pensions in the United States and Canada. While traditional approaches focus on the firm as the key to analyzing pension obligations and the impact of pensions on economic processes, Sahin takes the individual worker as the unit of analysis. The evolution of costs and benefits are then determined over the work life, which may include several jobs and membership in different pension plans. Because the conventional approaches generally assume no job mobility and a single employer, Sahin demonstrates, they fail to adequately reflect the actual status of individual pension benefits, the effects of job mobility, and the unequal distribution of pension benefits to individuals with comparable working lives and wage profiles.

To gain a clear view of private pensions and their impact on workers, employers, and public policy, Sahin shows that an analytical model that takes into account the interaction of job mobility, inflation, vesting rules, pension coverage, and portability must be employed. By taking the worker as the unit of analysis and emphasizing the dynamics of pension accumulation, Sahin is able to properly assess pension benefits from the perspective of the individual worker who needs to make rational job decisions, from the point of view of the employer concerned with the efficient and economical use of human resources, and from the public policy standpoint where the issue is the overall effectiveness of the private pension system. A pioneering contribution to the study of pension benefits, this volume will be of significant value to employee benefit specialists, policymakers, actuaries, and financial advisors.

Book Synopsis

The author presents a new approach to the study of private pensions in the united States and Canada. Whereas traditional approaches focus on the firm as the key to analyzing pension obligations and the impact of pensions on economic processes, Sahin takes the individual worker as the unit of analysis. The evolution of costs and benefits are then determined over the work life, which may include several jobs and membership in different pension plans. The Worklife Report

Sahin presents a new approach to the study of private pensions in the United States and Canada. While traditional approaches focus on the firm as the key to analyzing pension obligations and the impact of pensions on economic processes, Sahin takes the individual worker as the unit of analysis. The evolution of costs and benefits are then determined over the work life, which may include several jobs and membership in different pension plans. Because the conventional approaches generally assume no job mobility and a single employer, Sahin demonstrates, they fail to adequately reflect the actual status of individual pension benefits, the effects of job mobility, and the unequal distribution of pension benefits to individuals with comparable working lives and wage profiles.

To gain a clear view of private pensions and their impact on workers, employers, and public policy, Sahin shows that an analytical model that takes into account the interaction of job mobility, inflation, vesting rules, pension coverage, and portability must be employed. By taking the worker as the unit of analysis and emphasizing the dynamics of pension accumulation, Sahin is able to properly assess pension benefits from the perspective of the individual worker who needs to make rational job decisions, from the point of view of the employer concerned with the efficient and economical use of human resources, and from the public policy standpoint where the issue is the overall effectiveness of the private pension system. A pioneering contribution to the study of pension benefits, this volume will be of significant value to employee benefit specialists, policymakers, actuaries, and financial advisors.

Review Quotes

?In Private Pensions and Employee Mobility, Sahin uses the individual as the unit of analysis in his study of private pension plans. This is different from other, more conventional methods of analuysis that use the organization as the focal point. . . . Pensions affect individual workers, employers and society as a whole. To gain an understanding of the extent to which these three classes are affected, Sahin uses an analytical model that considers factors such as inflation, job mobility, portability of funds and vesting rules. Because the individual is the unit of analysis that Sahin uses, his model is able to aid the individual in career decisions with regard to pension benefits. In addition, the model is able to help the employer maximize the efficiency of the human resources function. From a public policy standpoint, the model can be used to evaluate the effectiveness of the private pension system in general. The book includes an introduction to terms such as pension coverage, portability, and vesting; a brief overview of various types of pension plans; and a discussion of the United States and Canada. The book also contains sections on worklife perspective, plan perspective and a case study on private pension plans.?-Personnel Administrators

?Sahin's model shows that most forms of private pensions tend to discourage mobility. By assuming the economic conditions and levels of mobility, Sahin is able to provide calculations to support his argument. His model allows him to explore a wide variety of issues in the field of pensions, from plan types to vesting rules. Private Pensions and Employee Mobility provides a framework for analyzing decisions on policy affecting this timely issue.?-Monthly Labor Review

?The traditional approach to determining pension benefit obligations is to look at a firm and predict economic influences on that firm. This methodology assumes that employees stay with one employer at a particular salary progression and vesting schedule. A new angle to figuring pension benefit obligations is to base assumptionns on the worker, not the firm. The individual is tracked through a lifetime of employment and participation in several different plans. This methodology takes into account the likelihood of numerous job changes, which greatly influence the size of an obligation. Mobility has an effect on salary and benefit levels, vesting, Social Security and, thus, benefit obligations.?-Employee Benefits Journal

"Sahin's model shows that most forms of private pensions tend to discourage mobility. By assuming the economic conditions and levels of mobility, Sahin is able to provide calculations to support his argument. His model allows him to explore a wide variety of issues in the field of pensions, from plan types to vesting rules. Private Pensions and Employee Mobility provides a framework for analyzing decisions on policy affecting this timely issue."-Monthly Labor Review

"The traditional approach to determining pension benefit obligations is to look at a firm and predict economic influences on that firm. This methodology assumes that employees stay with one employer at a particular salary progression and vesting schedule. A new angle to figuring pension benefit obligations is to base assumptionns on the worker, not the firm. The individual is tracked through a lifetime of employment and participation in several different plans. This methodology takes into account the likelihood of numerous job changes, which greatly influence the size of an obligation. Mobility has an effect on salary and benefit levels, vesting, Social Security and, thus, benefit obligations."-Employee Benefits Journal

"In Private Pensions and Employee Mobility, Sahin uses the individual as the unit of analysis in his study of private pension plans. This is different from other, more conventional methods of analuysis that use the organization as the focal point. . . . Pensions affect individual workers, employers and society as a whole. To gain an understanding of the extent to which these three classes are affected, Sahin uses an analytical model that considers factors such as inflation, job mobility, portability of funds and vesting rules. Because the individual is the unit of analysis that Sahin uses, his model is able to aid the individual in career decisions with regard to pension benefits. In addition, the model is able to help the employer maximize the efficiency of the human resources function. From a public policy standpoint, the model can be used to evaluate the effectiveness of the private pension system in general. The book includes an introduction to terms such as pension coverage, portability, and vesting; a brief overview of various types of pension plans; and a discussion of the United States and Canada. The book also contains sections on worklife perspective, plan perspective and a case study on private pension plans."-Personnel Administrators

About the Author

IZZET SAHIN is Max H. Karl Research Professor at the School of Business Administration, University of Wisconsin, Milwaukee. In the area of pensions he has published extensively in various journals and conducted a number of studies for the Royal Commission on the Status of Pensions in Ontario (1978-79), Government of Ontario (1981-82), and the International Foundation of Employee Benefit Plans (1985).