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多乐登 · 2025年06月28日

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NO.PZ202301040900001202

问题如下:

(2) Contrast the return and risk objectives of the R-Cubed pension and defined contribution plans.

解释:

Return Objective

The return objective of the pension plan is lower than that of the defined contribution plan,
which has no well-defined benefit target. While the return of the defined contribution plan may be oriented more towards growth media in pursuit of higher alpha strategies, the pension plan has ongoing and increasing payout targets to meet. The pension plan cannot focus exclusively on the production of income. It will need to invest in growth-oriented media to preserve the purchasing power of its contractual benefits as well as to amortize its underfunded status over time.

Risk Objective

The defined contribution plan can undertake greater risk than the pension plan because its workforce is younger, benefits commence at a later age, there is no predetermined benefit target to meet, and the benefits are not indexed to inflation. The asset base of the defined contribution plan, unlike that of the pension, is expected to increase, allowing the plan to invest in riskier investments.

## **Return Objective** 

- **DB Plan**: Lower return target (must balance growth *and* income to meet payouts and inflation indexing). 

- **DC Plan**: Higher return focus (growth-oriented, no fixed liabilities; participants bear risk). 


### **Risk Objective** 

- **DB Plan**: Lower risk tolerance (aging workforce, inflation-linked payouts, underfunded status). 

- **DC Plan**: Higher risk capacity (younger workforce, no benefit guarantees, growing asset base). 


**Key**: DB prioritizes liability-matching with modest growth; DC pursues aggressive growth with higher risk. 

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