AKB5116 Pension Systems and Investment PlanningBahçeşehir UniversityDegree Programs ACTUARIAL SCIENCE (TURKISH, NON-THESIS)General Information For StudentsDiploma SupplementErasmus Policy StatementNational QualificationsBologna Commission
ACTUARIAL SCIENCE (TURKISH, NON-THESIS)
Master TR-NQF-HE: Level 7 QF-EHEA: Second Cycle EQF-LLL: Level 7

Course Introduction and Application Information

Course Code Course Name Semester Theoretical Practical Credit ECTS
AKB5116 Pension Systems and Investment Planning Fall
Spring
3 0 3 12
This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester.

Basic information

Language of instruction: Turkish
Type of course: Departmental Elective
Course Level:
Mode of Delivery: Face to face
Course Coordinator : Dr. Öğr. Üyesi BAHAR KÖSEOĞLU
Recommended Optional Program Components: None.
Course Objectives: Introduce the students to the basics of private pension funds and social security systems.

Learning Outcomes

The students who have succeeded in this course;
Students will learn the basics of private and social pension plans.They will also learn how financing mechanisms of defined benefit and defined contribution plans as well as investment policies and management of private pension plans.

Course Content

Intorduction to basic pension models. Defined benefit and defined contribution cost methods. Definition of different methods in financing defined benefit plans and inter method movements. Investment strategies in defined contribution plans. Creation of portfolios. Definition of derivative products and their usage in risk diversifications.

Weekly Detailed Course Contents

Week Subject Related Preparation
1) General review of private pension funds and sosial security systems.
2) Defined benefit and defined contributions cost methods.
3) Rewiew of defıned benefit plans. Unit credit and projected unit credit methods.
4) Individual and aggregated methods in denifed benefit plans.
5) Inter model movements in Defined Benefit cost methods.
6) Defined Contributions cost methods. Basic investment policies.
7) Portfolio creation. Basic risk management strategies.
8) Risk hedging financial instruments.
9) Basic financial derivatives used in defined contributions plans.
10) Options, futures and forwards contracts. Binomial Model. Creation of risk elimination portfolio(hedging portfolio).
11) Black and Scholes Model. Model Greeks and usage of Greeks in Risk eliminations.
12) Basic option and advanced option strategies. Application examples.
13) Investment policies in defined contribution plans. Usage of annuities. Longevity risk and elimination of this risk.
14) Inter model movements between defined benefit and defined contribution methods. Advantages and disadvantages of plans.
15) Final exam.
16) Final Exam

Sources

Course Notes / Textbooks: Arthur W. Anderson, 'Pension Mathematics for Actuaries', ACTEX Publications 2006

David Blake, 'Pension Economics', John Wiley & Sons',Ltd 2006

William H. Aitken, 'Pension Funding and Valuation', ACTEX Publications 1996

David Blake, 'Pension Finance', John Wiley & Sons',Ltd 2006

Don M. Chance, 'An Introduction to Derivatives and Risk Management', Thomson - South Western 2004

References: Olivia Mitchell, J. Poterba, M. Warshawsky, "New Evidence on the Money's Worth of Individual Annuities", NBER Working Paper.

D. Blake et.al, Pensionmetrics I and II, The Pension Institute, U.K.

Evaluation System

Semester Requirements Number of Activities Level of Contribution
Homework Assignments 7 % 15
Midterms 2 % 50
Final 1 % 35
Total % 100
PERCENTAGE OF SEMESTER WORK % 65
PERCENTAGE OF FINAL WORK % 35
Total % 100

ECTS / Workload Table

Activities Number of Activities Duration (Hours) Workload
Course Hours 14 3 42
Study Hours Out of Class 14 3 42
Homework Assignments 7 8 56
Midterms 2 14 28
Final 1 24 24
Total Workload 192

Contribution of Learning Outcomes to Programme Outcomes

No Effect 1 Lowest 2 Low 3 Average 4 High 5 Highest
           
Program Outcomes Level of Contribution
1) Acquire the quantitative skills to become an actuary. 5
2) Will know about risks and ways to manage risk. 4
3) Will know about financial planning and its role in actuarial management. 4
4) Will be able to design new products and carry profitability tests and scenario analyses. 4
5) Besides gaining competence in theoretical subjects, the graduate will also be aware of practical issues and applications through lecturers and instructors who have market experience. 3
6) Will be able to follow all innovations and carry on research on the particular area. 4
7) Will share information with colleagues and will use it for project development..
8) Will be able to apply and make the necessary adaptation to all new rules and regulations.