As a comparative analysis of the contribution and benefit plans in the insurance bussiness and sample application

The main goal of the thesis is to compare defined benefit plan and defined contribution plan. In this context, the element that is essential to compare is the rate of return risk. The effects of the rate of return under the fixed conditions and variable conditions after a certain period on the contribution, pension, actuarial liability, lump sum and tax were to be reviewed. In other words, it was investigated the effects of the rate of return risk implying the expected rate of return?s variation on the participants, pension companies and tha states. Then, a new pension plan has been developed to suggest.The application ground on the basis of individual pension system to compare two pension plans face the same conditions. The application developed based on the rules adhering to systems. Within the scope of application, examples were men who want to volunteer to paticipate in private pension age between 18?46 individuals. It is assumed that in the defined benefit plans individuals want to receive 90% of period of the last three terms average salary as the pension, while in the defined contribution plan individuals want to contribute 10% of salary. For this purpose actuarial balance in establishment of ? Individual Fixed Premium Method? is applied, ?Prospective Method? is used to calculate actuarial liability.Application results in defined benefit plans confirmed that under the fixed rate of return conditions increasing the rate of return reduces contribution, actuarial liability lump sum and tax , but not affects pension. The variation of rate of return condition on 10th period, this return doesn?t affect contribution, pension, lump sum and tax, but affects actuarial liability. In defined contribution plan, under the fixed rate of return conditions, change of rate of return doesn?t affect contribution but increasing of rate of return makes pension, actuarial liability, lump sum and tax increased, increasing of return condition on 10th period, this doesn?t affect contribution, actuarial liability but this makes pension, lump sum and tax increased. Purposed new plan, in the fixed rate of return condition, has same results as defined benefit plan, in variation of rate of return on 10th period condition, contribution and rate of return move in the opposite way and actuarial liability and pension aren?t affected. While this effect has been continuning in premium payment period, they lead to the defined benefit plan as the premium payment period ends. However, rate of return risk establishment has been blocked to burden just only participant or on the pension companies. Thus, the new pension plan could be revealed more equtable retirement plan in term of rate of return risk.