Good Practice Principles in Modelling Defined Contribution Pension Plans

Round 1

Reviewer 1 Report

“Good Practice Principles in Modelling Defined Contribution 2 Pension Plans” This paper deals with a very important subject that has the potential to be of interest to a wide collective of readers including social security actuaries, public finance economists and experts in finance. It could be a meeting point for these groups of researchers. The paper is very well written, clear and very useful for practitioners, pension regulators and policymakers. The authors are well-known researchers in the field of pension economics and finance. As a minor comment, the references could be updated and expanded.

Author Response

Dear authors, it has been a pleasure to go through your article and enjoy reading it. The content is easy to understand, relevant for practitioners and also researchers in the ares (particular, if they also teach) and it shows a lot of experience to present it that way. I only have some very minor issues: p.4, footnote 4: "follow a geometric Brownian process with a mean of 2% per annum"; if you calculate the real GDP growth rate according to the formula Real GDP growth rate = (most recent year's real GDP - the last year's real GDP) / the previous year's real GDP then I guess that you mean that the expected accumulation factor of the real GDP per annum is 1.02 and the real GDP is assumed to follow a geometric Brownian motion. In this case the real growth rate is no geometric Brownian motion, but this might be a too technical issue. I leave it to you if you indeed want to clarify this in your contribution. FN dropped so no longer relevant p.7, l. 256: "occur a younger age" replace by "occur at a younger age" corrected p.10: The font sizes in Principle 10 should be equal. corrected p.13, l. 419: "to his pension" replace by "to his or her pension" as you used his or her in the other part of the sentence corrected p.17: You might rethink to give shorter versions of the Principles in the conclusion part, as the originally stated versions sometimes mix principle and justifcation. Maybe the justification might not be needed in "Conclusion and caveat" We did not shorten the Principles in the conclusion part - as we did not think it was necessary

Author Response File: Author Response.pdf

Reviewer 2 Report

Dear authors,

it has been a pleasure to go through your article and enjoy reading it. The content is easy to understand, relevant for practitioners and also researchers in the ares (particular, if they also teach) and it shows a lot of experience to present it that way. I only have some very minor issues:

p.4, footnote 4: "follow a geometric Brownian process with a mean of 2% per annum"; if you calculate the real GDP growth rate according to the formula

Real GDP growth rate = (most recent year's real GDP - the last year's real GDP) / the previous year's real GDP

then I guess that you mean that the expected accumulation factor of the real GDP per annum is 1.02 and the real GDP is assumed to follow a geometric Brownian motion. In this case the real growth rate is no geometric Brownian motion, but this might be a too technical issue. I leave it to you if you indeed want to clarify this in your contribution.

p.7, l. 256:   "occur a younger age" replace by "occur at a younger age"

p.10: The font sizes in Principle 10 should be equal.

p.13, l. 419: "to his pension" replace by "to his or her pension" as you used his or her in the other part of the sentence

p.17: You might rethink to give shorter versions of the Principles in the conclusion part, as the originally stated versions sometimes mix principle and justifcation. Maybe the justification might not be needed in "Conclusion and caveat"

Author Response

Reviewer 2: ----------------------------------------------------------------------- "Good Practice Principles in Modelling Defined Contribution 2 Pension Plans” This paper deals with a very important subject that has the potential to be of interest to a wide collective of readers including social security actuaries, public finance economists and experts in finance. It could be a meeting point for these groups of researchers. The paper is very well written, clear and very useful for practitioners, pension regulators and policymakers. The authors are well-known researchers in the field of pension economics and finance. As a minor comment, the references could be updated and expanded. ----------------------------------------------------------------------- References have been updated and expanded

Author Response File: Author Response.pdf