Are defined contribution pension schemes socially sustainable? A conceptual map from a macroprudential perspective
If the combined retirement income, provided by public and private defined contribution (DC) pension schemes, falls below socially acceptable standards, there is a political risk that consensus seeker policymakers could yield to pressures to commit future fiscal revenues. These contingent liabilities, when incorporated in markets’ expectations, are bound to create spillovers on sovereign risk, with negative feedback loops on the capital adequacy of banks and of other intermediaries, owing to losses on their government paper. Among the causes of reduced annuities out of the final assets in DC pension funds is an equity risk premium much lower than the commonly values advertised by the industry and by policymakers. From a macroprudential perspective, this political risk should be taken into account in stress tests assessing banks’ resilience to financial shocks.
|Date of creation:||Oct 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.economia.unimore.it|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob J. M., 2011.
"Financial literacy, retirement planning, and household wealth,"
CFS Working Paper Series
2011/21, Center for Financial Studies (CFS).
- Maarten C.J. van Rooij & Annamaria Lusardi & Rob J.M. Alessie, 2012. "Financial Literacy, Retirement Planning and Household Wealth," Economic Journal, Royal Economic Society, vol. 122(560), pages 449-478, 05.
- Maarten van Rooij & Annamaria Lusardi & Rob Alessie, 2011. "Financial Literacy, Retirement Planning, and Household Wealth," DNB Working Papers 313, Netherlands Central Bank, Research Department.
- Maarten van Rooij & Annamaria Lusardi & Rob J. Alessie, 2011. "Financial Literacy, Retirement Planning, and Household Wealth," NBER Working Papers 17339, National Bureau of Economic Research, Inc.
- Maarten van Rooij & Annamaria Lusardi & Rob Alessie, 2011. "Financial Literacy, Retirement Planning, and Household Wealth," CeRP Working Papers 119, Center for Research on Pensions and Welfare Policies, Turin (Italy).
- Grech, Aaron George, 2010.
"Assessing the sustainability of pension reforms in Europe,"
27407, University Library of Munich, Germany.
- Aaron George Grech, 2010. "Assessing the sustainability of pension reforms in Europe," LSE Research Online Documents on Economics 43865, London School of Economics and Political Science, LSE Library.
- Aaron George Grech, 2010. "Assessing the sustainability of pension reforms in Europe," CASE Papers case140, Centre for Analysis of Social Exclusion, LSE.
- Grech, Aaron George, 2013. "Assessing the sustainability of pension reforms in Europe," MPRA Paper 51474, University Library of Munich, Germany.
- Giuseppe Grande & Ignazio Visco, 2010. "A public guarantee of a minimum return to defined contribution pension scheme members," Temi di discussione (Economic working papers) 762, Bank of Italy, Economic Research and International Relations Area.
- S. N. Smirnov, 2011. "The Pension System," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 54(5), pages 20-30, September.
When requesting a correction, please mention this item's handle: RePEc:mod:wcefin:11101. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giuseppe Marotta)
If references are entirely missing, you can add them using this form.