## Stress Tests for Defined Benefit Pension Plans – A Primer

_IMF Working Papers, February 1, 2011_

## Source details

**Canonical URL:** [Stress Tests for Defined Benefit Pension Plans – A Primer](https://www.imf.org/en/publications/wp/issues/2016/12/31/stress-tests-for-defined-benefit-pension-plans-a-primer-24623)

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## Bibliographic details
- Authors: Gregorio Impavido
- Published: February 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455216765.001

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### Summary and purpose
- Stress testing is presented as a useful and increasingly popular, yet sometimes misunderstood, method of analyzing the resilience of financial systems to adverse events.
- The paper aims to demystify stress tests and illustrate their strengths and weaknesses.
- Using an Excel-based template with institution-specific data, readers are walked through the basics of liability valuation and stress testing of assets and liabilities of a typical defined benefit plan.

### Methodology and tools
- Practical walkthrough using an Excel-based template with institution-specific data.
- Core analytical focus: liability valuation and stress testing of assets and liabilities for a typical defined benefit plan.

### Strengths and weaknesses (as emphasized)
- Strengths: Provides a hands-on, template-driven approach to applying stress testing to defined benefit pension plans.
- Weaknesses: Stress tests can be misunderstood; the paper seeks to clarify limitations and appropriate interpretations.

### Subjects and keywords
- Subject: Discount rates, Insurance, Pensions, Retirement, Stress testing
- Keywords: interest rate, present value, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/stress-tests-for-defined-benefit-pension-plans-a-primer-24623_