National Academies Press: OpenBook
« Previous: Retirement in DYNASIM2
Suggested Citation:"DYNASIM2 Pension Coverage and Characteristics." National Research Council. 1991. Improving Information for Social Policy Decisions -- The Uses of Microsimulation Modeling: Volume II, Technical Papers. Washington, DC: The National Academies Press. doi: 10.17226/1853.
Page 133

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

DYNASIM2 AND PRISM: EXAMPLES OF DYNAMIC MODELING 133 DYNASIM2 Pension Coverage and Characteristics The jobs module is the first module run on individuals under age 58 and is run after the retirement module in each year after age 58. The jobs module uses the labor force information created in the Family and Earnings History submodel to help determine whether the individual has changed jobs, and if a job change occurs, this module chooses an industry of employment and an associated set of pension plan characteristics. New entrants to the labor force and reentrants are all assumed to obtain a new job upon entry. In addition, some individuals who participated in the labor force this year and last are assumed to change jobs. If the individual obtains a new job, the module simulates an industry on the basis of the individual's sex, education, and past industry of employment. Based on industry assignment, a set of pension characteristics is simulated for this job. DYNASIM2 does not include a database of pension characteristics as does PRISM, so pension plans are built up by simulating each characteristic in turn. Coverage status is simulated first and then plan participation. The plan participation probabilities are based on the fact that ma ny employees must build up tenure on the job and work full time before they are eligible to participate. For plan participants, the type of coverage is simulated, including whether single or multiemployer status and whether defined contribution or defined benefit. These types of coverage tend to vary by industry of employment. When the individual leaves a job (either to change jobs or to retire), a pension benefit is calculated by the employer pension module. This module is also used in order to calculate a pension benefit when the retirement module is running because the expected pension benefit helps to determine whether or not the individual will retire. The employer pension module determines probabilistically whether the individual is eligible for a pension. Probabilities are based on age, industry, and the number of years on the job. If the individual is not eligible for a pension, vesting status is assigned probabilistically. If the individual is pension eligible, a benefit formula is assigned, and the benefit is computed on the basis of characteristics of the benefit formula, past earnings, age, and other variables. If the individual is changing jobs, this pension is saved along with other characteristics of the job. If the retirement module is running, the pension benefit is used with the social security benefit to determine whether the individual retires this year. The social security module calculates a social security benefit if the individual meets eligibility requirements for a disability or retirement benefit (by age, disability, and quarters of covered earnings). If the individual is eligible, the module uses information on previous earnings to calculate the primary insurance amount, adjusts that amount for the individual's age, and compares the benefit to current earnings to determine whether the individual receives any social security this year. This module is highly parameterized to permit the user

Improving Information for Social Policy Decisions -- The Uses of Microsimulation Modeling: Volume II, Technical Papers Get This Book
Buy Paperback | $100.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

This volume, second in the series, provides essential background material for policy analysts, researchers, statisticians, and others interested in the application of microsimulation techniques to develop estimates of the costs and population impacts of proposed changes in government policies ranging from welfare to retirement income to health care to taxes.

The material spans data inputs to models, design and computer implementation of models, validation of model outputs, and model documentation.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook,'s online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!