The Pension Challenge

This book, the first in a new series produced by the Pension Research Council of the Wharton School in collaboration with Oxford University Press, explores ways to enhance retirement security in a volatile financial environment. The book begins by assessing the myraid retirement risks confronting employees, retirees, employers and governments. This book illustrates how stakeholders can reinvent pensions that perform will in a competitive global setting. Contributors then indicate how pension systems can be better designed to help protect against these risks. Of special interest is a discussion of new financial products and structures to meet and manage challenges to old-age security. Examples considered include pension investment guarantees and hedges, adapting catastrophe bonds to the pension context, and key regulatory draw important lessons for a wide range of countries, drawing from both developed and developing market experiences. Contributors include world-famous finance experts and risk management faculty, development economists, pension regulators and pension consultants.

The book offers new ways to think about retirement security in a volatile financial environment. Myriad retirement risks confront employees, retirees, employers, and governments. This book illustrates how stakeholders can reinvent pensions that perform well in a competitive global setting.

1. Overview: Developments in Risk Management for Retirement Security; PLAN SPONSORS AND RETIREMENT INCOME RISK; 2. An Analysis of Investment Advice to Retirement Plan Participants; 3. The Role of Company Stock in Defined Contribution Plans; 4. Company Stock and Pension Plan Diversification; 5. Integrating Payouts: Annuity Design and Public Pension Benefits in Mandatory Defined Contribution Plans; 6. Risk Transfer in Public Pension Plans; 7. Securing Public Pension Promises through Funding; GLOBAL DEVELOPMENTS IN RETIREMENT RISK TRANSFER; 8. Understanding Individual Account Guarantees; 9. Money-Back Guarantees in Individual Account Pensions: Evidence from the German Pension Reform; 10. Hedging Segregated Fund Guarantees; 11. Retirement Guarantees in Mandatory Defined Contribution Systems; 12. Retirement Guarantees in Voluntary Defined Contribution Plans; 13. Securitized Risk Instruments as Alternative Pension Fund Investments; 14. Credit Implications of the Payout Annuity Market