The mathematical and philosophical concept of ‘vesting’

Mitsuhiro Taniguchi, Japan

It is generally deemed that ‘vesting’ is merely a right to receive benefits by a plan document of a pension plan. In this paper I will try to grasp philosophically the concept of ‘vesting’ and to describe mathematically what is ‘vesting’. I consider ‘vesting’ a value function from a set of terms of participant for a plan in his/her lifetime. A plan document of the plan describes the value of the function as benefits by the plan. I think that how to grasp the concept of ‘vesting’ and how to describe what is ‘vesting’ should be discussed presupposing ‘vesting’ could be prescribed in a participant’s lifetime as the domain of the function. I will represent these results using simple models, and then try to analyze phenomena that occur in the models. As a result, I can understand that ‘vesting’ is based on the principle of mutual aid and not equity. It should require circumspection that a mathematical method is used for certifying the conservation of ‘vesting’ and so on, because the method, which essentially possesses logical consistency and reproducibility, is usually used for embodying the principle of equity.
Date: 30 May - Time: 8:30 to 10:00 - Room: 253
Theme: 9.A. Various topics