On May 1, three Isenberg finance majors explained retirement options to a standing-room-only gathering of more than 100 UMass faculty and staff members. The senior honors students—Allen Lasoff ’15, Tony Dombrowski ’15, and Ben Gross ’15—described a user-friendly web site tool that they had devised for employees contemplating a one-time opportunity to switch from one retirement plan to a second.* Employees faced the decision of swapping the Commonwealth’s flexible, portable Optional Retirement Program (ORP) for a second more established plan, the Massachusetts State Employees’ Retirement System (MSERS).
During the hour-long information session, the students took employees on a step-by-step tour of the tool, which is available here. With added insights from faculty supervisors Nikos Artavanis and Nikunj Kapadia, the students answered questions about the costs and benefits of the transfer, various loopholes, and courses of action to avoid.
Demonstrating the tool on a large overhead screen, the students showed their audience how to compare the two options by bringing expected cash flows to the time of one’s expected retirement and by comparing average rates of returns from both plans. To help employees calculate those outcomes, the tool incorporated two what-if variables: an employee’s individual life expectancy and a discount rate comprising inflation risk and a second (unlikely) risk of the MSERS plan defaulting.
The three seniors—all students in Dr. Artavanis’ senior honors course—completed their project as part of their senior honors thesis. In addition to their creative and technical work, they demonstrated adept communications skills in fielding questions and comments from a broad spectrum of employees.
“This was easily the most visible public service by our students this year,” noted finance department chair Sanjay Nawalkha. “The May 1st gathering was the third information session. In other words, the students helped hundreds of employees to make better decisions about their financial future.”
*The students received software development assistance from computer science major Chris Scott.