Retirement Investors' Club Plan Document; 457 Employee Contribution Plan, 2005

This Plan is intended to satisfy the requirements for an “eligible deferred compensation plan” under Section 457 of the Internal Revenue Code of 1986, as amended from time to time, and all other applicable provisions of law and the regulations issued thereunder. This Plan may be referred to as “The State of Iowa’s 457 Employee Contribution Plan”, which is one of two plans that comprise the Retirement Investors’ Club (RIC).

Employee referrals and efficiency wages

Many workers believe that personal contacts are crucial for obtainingjobs in high-wage sectors. On the other hand, firms in high-wage sectorsreport using employee referrals because they help provide screening andmonitoring of new employees. This paper develops a matching model thatcan explain the link between inter-industry wage differentials and useof employee referrals. Referrals lower monitoring costs because high-effortreferees can exert peer pressure on co-workers, allowing firms to pay lowerefficiency wages. On the other hand, informal search provides fewer job andapplicant contacts than formal methods (e.g., newspaper ads). In equilibrium,the matching process generates segmentation in the labor market becauseof heterogeneity in the size of referral networks. Referrals match good high-paying jobs to well-connected workers, while formal methods matchless attractive jobs to less-connected workers. Industry-level data show apositive correlation between industry wage premia and use of employeereferrals. Moreover, evidence using the NLSY shows similar positive andsignificant OLS and fixed-effects estimates of the returns to employeereferrals, but insignificant effects once sector of employment is controlledfor. This evidence suggests referred workers earn higher wages not becauseof higher unobserved ability or better matches but rather because theyare hired in high-wage sectors.

Award errors and permanent disability benefits in Spain

There is a controversial debate about the effects of permanent disability benefits on labormarket behavior. In this paper we estimate equations for deserving and receiving disabilitybenefits to evaluate the award error as the difference in the probability of receiving anddeserving using survey data from Spain. Our results indicate that individuals aged between55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.

The benefits of limited feedback in organizations

In most firms, managers periodically assess workers' performance. Evidence suggeststhat managers withhold information during these reviews, and some observersargue that this necessarily reduces surplus. This paper assesses the validity of thisargument when workers have career concerns. Disclosure has two effects: it exposesthe worker to uncertainty about future effort levels, but allows him to use current effortto influence his employer's beliefs about future effort. The surplus-maximizingdisclosure policy reveals output realizations in the center of the distribution, butnot in the tails. Thus, it is efficient for firms to reveal some but not all performanceinformation.

On the valuation and incentive effects of executive cash bonus contracts

Executive compensation packages are often valued in an inconsistent manner: while employee stock options (ESOs) are typically valued ex-ante, cash bonuses are valued ex-post. This renders the existing valuation models of employee compensation packages theoretically unsatisfactory and, potentially, empirically distortive. In this paper, we propose an option-based framework for ex-ante valuation of cash bonus contracts. After obtaining closed-form expressions for ex-ante values of several frequently used types of bonus contracts, we utilize them to explore the e¤ects that the shape of a bonus contract has on the executive s attitude toward risk-taking. We, also, study pay-performance sensitivity of such contracts. We show that the terms of a bonus contract can dramatically impact both risk-taking behavior as well as pay-performance incentives. Several testable predictions are made, and venues of future research outlined.

Unemployment vs. mismatch of talents: Reconsidering unemployment benefits

We develop an equilibrium search-matching model with risk-neutral agentsand two-sided ex-ante heterogeneity. Unemployment insurance has thestandard effect of reducing employment, but also helps workers to get a suitable job. The predictions of our simple modelare consistent with the contrasting performance of the labor market in Europeand US in terms of unemployment, productivity growth and wage inequality.To show this, we construct two fictitious economies with calibratedparameters which only differ by the degree of unemployment insurance andassume that they are hit by a common technological shock which enhancesthe importance of mismatch. This shock reduces the proportion of jobs whichworkers regards as acceptable in the economy with unemployment insurance(Europe). As a result, unemployment doubles in this economy.In the laissez-faire economy (US), unemployment remains constant,but wage inequality increases more and productivity grows less due to largermismatch. The model can be used to address a number of normative issues.

Employee referrals and the inter-industry wage structure

This paper investigates the role of employee referrals in the labor market.Using an original data set, I find that industries that pay wage premia andhave characteristics associated with high-wage sectors rely mainly on employeereferrals to fill jobs. Moreover, unemployment rates are higher in industries which use employee referrals more extensively. This paper develops an equilibrium matching model which can explain these empirical regularities. Inthis model, the matching process sorts heterogeneous firms and workers into two distinct groups: referrals match "good" jobs to "good" workers, while formalmethods (e.g., newspaper ads and employment agencies) match less-attractive jobs to disadvantaged workers. Thus, well-connected workers who learn quickly aboutjob opportunities use referrals to jump job queues, while those who are less well placed in the labor market search for jobs through formal methods. The split of firms and workers between referrals and formal search is, however, not necessarily efficient. Congestion externalities in referral search imply that unemployment would be closer to the optimal rate if firms and workers 'at themargin' searched formally.

When are layoffs acceptable? Evidence from a quasi-experiment

Many authors have discussed a decline in internal labor markets and an apparent shift to a new employment contract, characterized by less commitment between employer and employee and more portable skills. These discussions occur without much evidence on what employment contract employees currently feel is fair. We perfomed quasi-experimental surveys to study when employees in the U.S. andCanada feel that layoffs are fair.Layoffs were perceived as more fair if they were due to lower product demand than if the result of employee suggestions. This result appears to be solely due to norms of reciprocity (companiesshould not punish employees for their efforts), rather than norms of sharing rents, as new technology was also considered a justification for layoffs.Consistent with theories of distributive and procedural equity, layoffs were perceived as more fair if the CEO voluntarily shared the pain. CEO bonuses due to layoffs lowered their reported fairness only slightly.Respondents in Silicon Valley were not more accepting of layoffsthan were those in Canada on average, although the justificationsconsidered valid differed slightly.

Hybrid risk adjustment for pharmaceutical benefits

This paper analyses the application of hybrid risk adjustment versus either prospective orconcurrent risk adjustment formulae in the context of funding pharmaceutical benefits for thepopulation of an integrated healthcare delivery organization in Catalonia during years 2002 and2003. We apply a mixed formula and find that a hybrid risk adjustment model increasesincentives for efficiency in the provision of low risk individuals at health organizations not only asa whole but also at each internal department compared to only prospective models by reducingwithin-group variation of drug expenditures.

State of Iowa Employee Handbook, Revised October 2003

I hope you will find a great deal of challenge and personal satisfaction in your employment with the State. You have an important role in accomplishing the goals of your department and of state government. The State has a proud tradition built on the excellence of its employees and their work. We challenge you to help maintain and improve upon this tradition. You soon will discover that our pride is contagious! As a state employee, it is very important that you always present the best possible image to the public. Remember to act promptly, be courteous, and treat people, our customers, respectfully. Your actions will make a lasting impression .... be sure it is a positive one. This is your employee handbook. This information is based on Iowa Department of Administrative Services – Human Resources Enterprise (DAS-HRE) rules and policies. Much of the information in this handbook is also covered in the State’s collective bargaining agreements. Where there are differences between a collective bargaining agreement and this handbook, the collective bargaining agreement prevails for employees covered by the agreement. Where there are differences between this handbook and DAS-HRE rules and policies, DAS-HRE rules and policies prevail. Some of the employee benefit plans described in this handbook are subject to legal requirements concerning reporting and disclosure. This handbook contains highlights of those plans. For complete details about benefit plans, consult the benefit handbooks and the official plan documents. In case of any discrepancy, the official plan documents prevail. Of course, changes in laws may affect the benefit programs described in this handbook. The State of Iowa reserves the right to amend the contents of this handbook at any time without prior notice. The provisions of this handbook and other policies do not establish contractual rights or conditions of employment between the State and its employees.

Access to a simulator is not enough: the benefits of virtual reality training based on peer-group-derived benchmarks--a randomized controlled trial.

BACKGROUND: Virtual reality (VR) simulators are widely used to familiarize surgical novices with laparoscopy, but VR training methods differ in efficacy. In the present trial, self-controlled basic VR training (SC-training) was tested against training based on peer-group-derived benchmarks (PGD-training). METHODS: First, novice laparoscopic residents were randomized into a SC group (n = 34), and a group using PGD-benchmarks (n = 34) for basic laparoscopic training. After completing basic training, both groups performed 60 VR laparoscopic cholecystectomies for performance analysis. Primary endpoints were simulator metrics; secondary endpoints were program adherence, trainee motivation, and training efficacy. RESULTS: Altogether, 66 residents completed basic training, and 3,837 of 3,960 (96.8 %) cholecystectomies were available for analysis. Course adherence was good, with only two dropouts, both in the SC-group. The PGD-group spent more time and repetitions in basic training until the benchmarks were reached and subsequently showed better performance in the readout cholecystectomies: Median time (gallbladder extraction) showed significant differences of 520 s (IQR 354-738 s) in SC-training versus 390 s (IQR 278-536 s) in the PGD-group (p < 0.001) and 215 s (IQR 175-276 s) in experts, respectively. Path length of the right instrument also showed significant differences, again with the PGD-training group being more efficient. CONCLUSIONS: Basic VR laparoscopic training based on PGD benchmarks with external assessment is superior to SC training, resulting in higher trainee motivation and better performance in simulated laparoscopic cholecystectomies. We recommend such a basic course based on PGD benchmarks before advancing to more elaborate VR training.

Socio-economic benefits of using space technologies to monitor and respond to earthquakes

Earthquakes represent a major hazard for populations around the world, causing frequent loss of life,human suffering and enormous damage to homes, other buildings and infrastructure. The Technology Resources forEarthquake Monitoring and Response (TREMOR) Team of 36 space professionals analysed this problem over thecourse of the International Space University Summer Session Program and published their recommendations in the formof a report. The TREMOR Team proposes a series of space- and ground-based systems to provide improved capabilityto manage earthquakes. The first proposed system is a prototype earthquake early-warning system that improves theexisting knowledge of earthquake precursors and addresses the potential of these phenomena. Thus, the system willat first enable the definitive assessment of whether reliable earthquake early warning is possible through precursormonitoring. Should the answer be affirmative, the system itself would then form the basis of an operational earlywarningsystem. To achieve these goals, the authors propose a multi-variable approach in which the system will combine,integrate and process precursor data from space- and ground-based seismic monitoring systems (already existing andnew proposed systems) and data from a variety of related sources (e.g. historical databases, space weather data, faultmaps). The second proposed system, the prototype earthquake simulation and response system, coordinates the maincomponents of the response phase to reduce the time delays of response operations, increase the level of precisionin the data collected, facilitate communication amongst teams, enhance rescue and aid capabilities and so forth. It isbased in part on an earthquake simulator that will provide pre-event (if early warning is proven feasible) and post-eventdamage assessment and detailed data of the affected areas to corresponding disaster management actors by means of ageographic information system (GIS) interface. This is coupled with proposed mobile satellite communication hubs toprovide links between response teams. Business- and policy-based implementation strategies for these proposals, suchas the establishment of a non-governmental organisation to develop and operate the systems, are included.

About IPERS, July 2008

It’s never too early to start thinking about retirement. Regardless of your retirement plans or anticipated retirement age, you want a financially secure retirement. IPERS provides the security you need through guaranteed benefits. With IPERS, unlike other retirement plans, benefits aren’t tied to the performance of the stock market and you don’t need to be an experienced investor to make your retirement dreams a reality. Remember, your IPERS benefits are only one part of your overall retirement savings. Your total retirement income will come from a combination of your IPERS benefits, social security, personal savings, and any other retirement plan benefits.

For New Members, July 2008

Congratulations on becoming an IPERS member. Your employment with an IPERS-covered employer means you’ve taken an important step in helping achieve your retirement security. It’s never too early to start thinking about retirement. Regardless of your retirement plans or anticipated retirement age, you want a financially secure retirement. IPERS provides the security you need through guaranteed benefits. With IPERS, unlike other retirement plans, benefits aren’t tied to the performance of the stock market and you don’t need to be an experienced investor to make your retirement dreams a reality. Remember, your IPERS benefits are only one part of your overall retirement savings. Your total retirement income will come from a combination of your IPERS benefits, social security,