Reorienting Retirement Risk Management

by Clark, Robert L.; Mitchell, Olivia S.

• ISBN13: 9780199592609
• ISBN10: 0199592608
• Format: Hardcover
• Copyright: 2010-10-21
• Publisher: Oxford University Press

Summary

Retirement risk management must be dramatically overhauled if workers and retirees are to better prepare themselves to meet future retirement challenges. Recent economic events including the global financial crisis have upended expectations about what pension and endowment fund managers can do. Employers and employees have found it difficult to make pension contributions, despite drops in retirement plan funding. In many countries, government social security systems are also facing insolvency. These factors, coupled with an aging population and rising longevity, are giving rise to serious questions about the future of retirement in America and around the world. This volume explores how workers and firms can reassess the risks associated with retirement saving and dissaving, to identify creative adjustments to adapt to these new risks and realities. One area explored is the key role for financial literacy and education programs. In addition, those acting as plan sponsors and fiduciaries must reconsider pension design to help them better address the new realities. Also novel financial products are described that can help with the design of retirement plans. Experts provide new research and offer policy recommendations, illustrating how retirement plans can be amended to better meet the retirement needs of workers and firms. This volume is an important addition to the Pensions Research Council / Oxford University Press series and to the current debate on retirement security.

Author Biography

Olivia S. Mitchell is the International Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, the Executive Director of the Pension Research Council, and the Director of the Boettner Center on Pensions and Retirement Research at the Wharton School. Concurrently Dr. Mitchell is a Research Associate at the National Bureau of Economic Research and a Co-Investigator for the AHEAD/Health and Retirement Studies at the University of Michigan. Dr. Mitchell's main areas of research and teaching are private and public insurance, risk management, public finance and labor markets, and compensation and pensions, with a US and an international focus. She received the B.A. in Economics from Harvard University and the M.A. and Ph.D. degrees in Economics from the University of Wisconsin-Madison.
Robert L. Clark is Professor of Management, Innovation, and Entrepreneurship and Professor of Economics at North Carolina State University. His research interests include retirement decisions, the choice between defined benefit and defined contribution plans, the impact of pension conversions to defined contribution and cash balance plans, the role of information and communications on 401(k) contributions, government regulation of pensions, and Social Security. Professor Clark serves on the Advisory Board of Wharton's Pension Research Council, is a Fellow of the Employee Benefit Research Institute and the TIAA-CREF Institute, and a member of the American Economic Association, the Gerontological Society of America, International Union for the Scientific Study of Population, and the National Academy of Social Insurance. Professor Clark earned an MA and the Ph.D. from Duke University and a BA from Millsaps College.

Table of Contents

Preface	p. v
List of Figures	p. ix
List of Tables	p. xi
Notes on Contributors	p. xiii
List of Abbreviations	p. xix
The Evolution of Retirement Risk Management	p. 1
Revisiting Retirements Saving and Dissaving Advice
Retirement Saving Adequacy and Individual Investment Risk Management Using the Asset/Salary Ratio	p. 13
Employer-Provided Retirement Planning Programs	p. 36
How Does Retirement Planning Software Handle Postretirement Realities?	p. 65
Impact of the Pension Protection Act on Financial Advice: What Works and What Remains to Be Done?	p. 86
The Environment for Retirement Plan Redesign
The Effect of Uncertain Labor Income and Social Security on Life-Cycle Portfolios	p. 107
The Declining Role of Private Defined Benefit Pension Plans: Who Is Affected, and How	p. 122
Rebuilding Workers' Retirement Security: A Labor Perspective on Private Pension Reform	p. 137
Longevity Risk and Annuities in Singapore	p. 156
Innovation in Retirement Risk Financing
Outsourcing Pension Longevity Protection	p. 179
Comparing Spending Approaches in Retirement	p. 198
Risk Budgeting for the Canadian Pension Plan Investment Board	p. 217
Can VEBAs Alleviate Retiree Health-Care Problems?	p. 241
End Pages	p. 265
Index	p. 269
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