Restructuring Retirement Risks

This book posits that retirement security is the central policy concern of our time. A generation of 'Baby Boomers' is on the verge of retirement, yet pension systems confront crushing challenges, and governments often appear confused about which direction they should move in. Contributors to this volume clarify the discussion by addressing the question: 'What are the new risks and rewards in pensions, and what paths can stakeholders chose to solve these problems?'. The chapters set their sights on employees' needs and expectations, employers' intentions and realizations, and policymakers' efforts to resolve the many challenges. Despite the fact that retirement systems face deep stresses exacerbated by volatile capital markets, poor corporate earning streams, weak macroeconomic performance, and international turmoil, nevertheless, contributors in this volume show courage and creativity in plotting the course over uneven terrain. In the book, three aspects of the evolution of risk and reward-sharing in retirement are evaluated, to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it formulates new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Third, it proposes several new strategies for managing retirement system risk. The volume represents an invaluable addition to the Pension Research Council/Oxford University Press series. It will be especially useful for managers working toward more efficient pension plans; to scholars and policymakers seeking to maximize pension design effectiveness; and to actuaries and tax specialists concerned with pension regulation. The Pension Research Council at the Wharton School of the University of Pennsylvania was founded 50 years ago to encourage research and teaching on pensions and retirement security. Council projects address the long-term issues that underlie contemporary concerns and seek to broaden public understanding of these complex arrangements through research into their social, economic, legal, actuarial, and financial foundations of privately and publicly-provided benefits. Contributors to this volume - Peter Albrecht, Chair for Business Administration, Risk Theory, Portfolio Management and Insurance, and Managing Director of the Institute for Insurance Science, both at the University of Mannheim, David Blitzstein, Director of the United Food and Commercial Workers International Union (UFCW) Negotiated Benefits Department, Henning Bohn, Professor of Economics at the University of California at Santa Barbara, Phyllis C. Borzi, Research Professor, Department of Health Policy, School of Public Health and Health Service, The George Washington University Medical Center and Of Counsel, O'Donoghue & O'Donoghue LLP, Washington, DC, Joachim Coche, Senior Economist, Risk Management Division, at the European Central Bank, in Frankfurt, Germany, Julia Lynn Coronado, a Senior Research Analyst at Watson Wyatt Worldwide, Douglas Fore, Principal Research Fellow at the TIAA-CREF Institute, Brian J. Fuller, Principal and actuary in Mercer's Richmond health care and group benefits practice, P. Brett Hammond, head of the Investment Analytics Group at the Teachers Insurance Annuity Association-College Retirement Equities Fund (TIAA-CREF), Sarah A. Holden, Senior Economist in the Research Department of the Retirement, Tax and International Division at the Investment Company Institute, J. Nellie Liang, Assistant Director of the Division of Research and Statistics of the Federal Reserve Board's overseas Capital Markets and Flow of Funds sector, Raimond Maurer, Chair and Full Professor for Investment, Portfolio Management and Pension Finance, Finance Department, Goethe University Frankfurt, Neal McCall, economist in the Office of Financial Institutions Policy, U.S. Treasury, David McCarthy, faculty member at the Tanaka Business School, Imperial College, London, Olivia S. Mitchell,Executive Director of the Pension Research Council, Wharton School, University of Pennsylvania , and the Director of the Boettner Center on Pensions and Retirement Research at the Wharton School, Anthony Neuberger, Professor of Finance at Warwick Business School, University of Warwick, England, Anna Rappaport, independent consultant, advocate, writer and speaker, Ralph Rogalla, research assistant at the Goethe University Frankfurt, Finance Department, Stephen P. Utkus, Director of the Vanguard Center for Retirement Research, Salvador Valdes-Prieto, Professor of Economics at the Catholic University of Chile, Jack VanDerhei, faculty member at Temple University's Fox School of Business and Management in the Department of Risk, Insurance, and Healthcare Management, George Wagoner, Principal and Chief Healthcare Actuary at Mercer Human Resource Consulting, Mark J. Warshawsky, Assistant Secretary for Economic Policy of the U.S. Treasury, John D. Worth, Director at the Office of Microeconomic Analysis of the U.S. Treasury, Tongxuan (Stella) Yang, researcher at the Radian Guaranty Inc., Frank Yeager, actuarial analyst in Mercer's Healthcare and Group Benefits practice.