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Losing billions is stressful, and the brave financiers who risk other people’s money need a way to cool out—hopping on the GV, say, for a bimbo-boffing weekend in the Bahamas. Thanks to the bailout, that’s history. The author imagines one fictional highflier’s shock as he rejoins the commercial-aviation herd.

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Chapter 9 Reforming the German Civil Servant Pension Plan

Raimond Maurer, Olivia S. Mitchell, Ralph Rogalla

The Future of Public Employee Retirement Systems·2009·3 citations

AbstractThis chapter analyzes the risks and rewards of moving from an unfunded defined benefit pension system to a funded plan for civil servants in Germany, allowing for alternative portfolio mixes using a Monte Carlo framework and a Conditional Value at Risk metric. The authors identify an investment strategy for plan assets that will minimize worst-case pension costs; this turns out to be 22 percent in equities, 47 percent in bonds, and 31 percent in real estate. The authors show that moving toward a funded pension system for German civil servants can be beneficial to both taxpayers and civil servants.

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