Optimal Investment of Defined Contribution Pension Plans -to prepare for aging society
Submitted by: Yoshiki Nagayama - Japan
What is the role of an actuary?
My answer is to enrich people's lives and make people happy. In today's aging society, the pension system is an important role of life.(This is especially true in Japan.) Recently, pension systems have shifted from Defined Benefit(DB) to Defined Contribution(DC) plans, but can a DC pension plan, where retirement payments are determined by each individual's investment, support retirement payments?
What This Video Is About?
If DC pension plan is mainstream, we actuaries must make people happy by DC pension plans. This video provides a specific solution to achieve a sufficient retirement benefits with a DC pension plan through mathematical optimization. This formula achieves mean maximization and variance minimization of assets in a DC pension plan. Watch the simulation. At the end, I explain my current dream that I want to realize using this formula. Build a better tomorrow with this Theory! ~Bridge to Tomorrow~