NO.PZ2019100901000013
问题如下：
Fiona Heselwith is a 40-year-old US citizen who has accepted a job with Lyricul, LLC, a UK-based company. Her benefits package includes a retirement savings plan. The company offers both a defined benefit (DB) plan and a defined contribution (DC) plan but stipulates that employees must choose one plan and remain with that plan throughout their term of employment.
The DB plan is fully funded and provides full vesting after five years. The benefit formula for monthly payments upon retirement is calculated as follows:
Final monthly salary × Benefit percentage of 2% × Number of years of service
The final monthly salary is equal to average monthly earnings for the last five financial years immediately prior to the retirement date
The DC plan contributes 12% of annual salary into the plan each year and is also fully vested after five years. Lyricul offers its DC plan participants a series of life-cycle funds as investment choices. Heselwith could choose a fund with a target date matching her planned retirement date. She would be able to make additional contributions from her salary if she chooses
Discuss the features that Heselwith should consider in evaluating the two plans with respect to the following:
i. Benefit payments
ii. Contributions
iii. Shortfall risk
iv. Mortality/longevity risks
选项：
解释：
i. Benefit payments:The benefit payments in DB plan is defined but uncertain in DC plan
ii. Contributions:The contribuitions in DC plan is certain but uncertain in DB plan.
iii. Shortfall risk:The employer bears the shortfall risk in the DB plan while the employee himself bears the shortfall risk.
iv. Mortality/longevity risks: In DB plan, it pools the mortality and longevity risks together.The people who die early leaves the money to the one who live longer.But in DC plan, the employee himself bear the longevity risk.
