NYU Stern School of Business

Undergraduate College


Spring 2011

Instructor Details

Biggs, John



KMC 8-51

Stern Executive in Residence and Adjunct Professor of Finance

Retired Chairman of TIAA-CREF and Fellow of the Society of Actuaries


Course Meetings

TR, 11:00am to 12:15pm


Final Exam:

Schedule exceptions
    Class will not meet on:
    Class will meet on:


Course Description and Learning Goals

This course would be an undergraduate half semester introduction to the major actuarial issues in financing retirement plans. The course is aimed at students who have progressed through the first actuarial courses and who are probably in their senior year. A popular career focus for many new actuaries is pension consulting which requires all the financial skills of actuaries normally associated with insurance companies. The course will not be focused on passing a specific actuarial exam although some assigned readings may be Society of Actuaries study notes.


Course Pre-Requisites



Course Outline

The course will focus on:

1.     The interesting financial theories raised by companies with large defined benefit pension plans, including ways to offset bizarre accounting principles, asset liability matching, and de-risking the financial aspects of such plans. Also ways to move to defined contribution plans via cash balance formats, longevity risk management and different theories of the financial economists models compared to traditional actuarial models.

2.    The significant role of defined contribution plans (mainly 401(k)s and IRAs), considering why they are so popular with employers and employees, and why they fail in many instances. Review of behavioral finance studies and theories, and how they explain the irrational ways employee decisions are made, and how they can be offset by automaticity and clever plan design.

3.    The dilemma of how to convert lump sum amounts at retirement into incomes that will last in retirement and yet be adequate and secure.

4.    The financing of post retirement medical care and long term care (nursing home stays) and how the employer, government and family responsibilities are evolving.

5.    The dilemmas in financing government entitlements (social security, Medicare and Medicaid) and the likely future—including projection of longevity.


Required Course Materials

Coming Up Short by Alicia Munnell on 401(k) Plans Fundamentals of Employee Benefit Programs, a handbook published by the Employee Benefit Research Institute (EBRI) and can be easily accessed on the EBRI Website <http://ebri.org/publications/books/index.cfm?fa=fundamentals>
or going to the EBRI website and accessing “Publications”. The book at $15 is worth owning since we only cover a few chapters.


Assessment Components

Grading will include:

   Class participation: 20%

   Midterm take home,open book factual multiple choice problem set: 30%

   A final take home exam will be a two hour time based set of four essays, selected by you from 6 possible questions: 50%




At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges  as a guide, the actual distribution for this course and your own grade will depend upon how well  you actually perform in this course.


Professional Responsibilities For This Course




In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:




Classroom Norms


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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