Because of the proliferation of types of hybrid plans and their growing importance, this paper evaluates a number of hybrid pension plans, including hybrid plans used to provide social security benefits in some countries. The paper provides an overview of types of hybrid plans provided around the world. Most of the hybrid plans are fairly new, but some have been in existence for many years, and some have not been developed but are proposals. The paper describes in depth as case studies four different hybrids: the hybrid DB plans in the Netherlands, where participants and retirees face benefit cuts if funding falls below a certain level; the nonfinancial DC plan in Sweden, which is the main part of social security and is similar in some respects to an unfunded cash balance plan but includes life expectancy indexing of benefits; cash balance plans in the United States, Canada and Japan, and the Riester plans in Germany, which are DC plans that involve a rate of return guarantee. The paper describes in less depth a broad range of hybrid plans that have been developed in different countries or that have been proposed. These plans are categorized as to the risks transferred to participants. Lastly, the paper constructs a risk index for further categorizing hybrid plans. In an appendix, the paper presents a survey of the types of hybrid pension plans used in a small selection of countries.
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