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5008114: C15 Pension Finance

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Semester:WS 20/21
Type:Module
Language:English
ECTS-Credits:3.0
Scheduled in semester:3
Semester Hours per Week / Contact Hours:28.0 L / 21.0 h
Self-directed study time:69.0 h

Module coordination/Lecturers

Curricula

Master's degree programme in Finance (01.09.2015)

Description

Life-Cycle View of Personal Finance
Defined Benefit vs. Defined Contribution Plans
Instruments Typically Used in Pension Finance
Models for Integrating Financial Risks with Other Risks like Longevity Risk

Lecture Goals

After completing this lecture, students have gained a solid background in financial decisions regarding longevity and retirement. They know how to combine valuation techniques from finance with those from actuarial mathematics, and understand the effects of longevity, bequest motive, and risk-return tradeoff on the corresponding choices made by individual investors.

Learning Outcomes

Understand and apply life-cycle models of individual investors
Distinguish between DB and DC pension plans and understand their respective implications
Combine financial models with models for longevity risk
Select appropriate financial instruments for individual pension planning and justify this selection economically

Qualifications

  • Understand and apply standard pension finance models
    Select appropriate financial instruments for individual pension planning and justify this selection economically
  • Integrate financial and actuarial aspects into combined life-cycle models of individual investors
    Evaluate investor-specific aspects regarding their relevance for pension finance decisions
  • Reflect on one's own situation and preferences regarding retirement planning
    Critically reflect on "me vs. heirs"-tradeoff inherent in pension finance decisions

Lectures Method

Interactive lecture with exercises

Admission Requirements

It is recommended to have successfully completed the module Financial Economics and Markets before enrolling in the module Pension Finance.

Literature

Milevsky, Moshe A.: "The Calculus of Retirement Income", Cambridge University Press, 2006.

Exam Modalities

See lecture within the module.

Assessment

Grading will be based entirely on the final exam.