Administration and Regulation of a Military Retirement System Funded by Private Sector Investments.

摘要

The purpose of this study was to investigate investment of military retirement system (MRS) funds in the private sector, as opposed to the current method of investing the funds within the Government, between 1985 and 1989, under assumptions of administrative and regulatory constraints; the timeframe was selected because in 1985 the Government began setting aside funds for future military retirement costs versus the pay-as-you-go method in previous years. The study had three objectives: (1) identify administrative factors that result from modifying the current MRS to an MRS funded by private sector investments; (2) identify regulatory constraints that could apply to the investment of military retirement funds in the private sector; (3) evaluate the MRS flow of funds under several investment plans that reflect assumptions of administrative and regulatory constraints. Administrative assumptions were based on the Federal Employee Thrift Savings Plan; regulatory assumptions were based on life insurance fund and private pension fund regulations. The results from analyzing the MRS flow of funds suggested that between fiscal years 1985 to 1989, a stock index plan, and to a lesser extent, a corporate bond index plan, improved the cumulative investment returns of the MRS fund; the price for this improvement was periods of volatility resulting in short term losses on investment returns as the current MRS investment approach with no volatility. Theses. (sdw)