Vol. 19 No. 39 (2023)

Artículos

Funding of a pension plan in a public university in Mexico: a numerical approach

Published 2023-07-03

  • Denise Gómez-Hernández

Denise Gómez-Hernández
Universidad Aut´ónoma de Queretaro

Abstract

The objective of this work is to show a numerical example of the actuarial liabilities and the annual cash flows that a database of employees of a university represent, calculating also the value of the contributions that targets these actuarial liabilities for different scenarios. The methodology used is actuarial calculations of the funding of a pension plan. The results are that
the pension plan is not actuarially viable as with the actual contribution of 5% it does not provide a replacement rate of 100% of the final salary. Also, that in order to obtain the 100% replacement rate, a contribution of as much as 22% of salary is required to target the benefit. The main limitation of this study is that it is a numerical example of a specific university. However, it shows that this one private pension plan struggles to meet its actuarial liabilities, as the literature suggest.

Keywords

Array, Array, Array, Array

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Author Biography

Denise Gómez-Hernández

Denise Gomez-Hernandez received a Ph. D. in actuarial science from City University in London and a Master Degree in actuarial science from Herriot Watt University in Edinburgh. She is currently teaching mathematics, life insurance and pensions at Universidad Autonoma de Queretaro. Her research interests include pension finance, life insurance and mortality, and her current research projects include a design of a pension plan for a public university in Mexico. In addition, she is member and founder of an actuarial academic network called Red Academica Actuarial and was honored with the membership at the National Researchers System (SNI) Level II for her contributions to the field.

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