Annuities are specifically designed to cover the risk that an individual outlives their own resources by transferring such risk to an insurance undertaking. Despite an increasing need for annuity products (due to increasing longevity, decreasing state pensions, a rise in Defined Contribution pension plans etc.), these markets remains under-developed in many OECD countries. This paper attempts to...
This paper examines how uncertainty regarding future mortality and life expectancy outcomes, i.e. longevity risk, affects employer-provided defined benefit (DB) private pension plans liabilities. The paper argues that to assess uncertainty and associated risks adequately, a stochastic approach to model mortality and life expectancy is preferable because it permits to attach probabilities to...
Uncertainty about length of life, longevity risk, is a growing financial problem for pension funds and annuity providers. They would like to transfer longevity risk away to institutions better placed to deal with it. Unfortunately, there is a lack of financial instruments to hedge against this longevity risk, thereby complicating risk management by pension funds and hindering the expansion of the...
Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. These funds have raised concerns about: (i) financial stability, (ii) corporate governance and (iii) political interference and protectionism. At the same time governments have formed other large pools of capital to finance public pension systems, i.e. Public...
This paper reviews the impact of ageing on private pensions, in particular on the payout phase, assesses the part that annuities can play in financing retirement, and examines the role of financial markets in facilitating the allocation on assets accumulated in defined contribution pension plans. A comprehensive set of recommendations for discussion is provided at the end of the paper. Este...
Pension funds are increasingly looking at infrastructure investment with some investors actively pursuing opportunities in the sector. Different countries are at different stages in the evolution of pension fund investment in infrastructure. A survey of a sample of the most significant actors was launched by the OECD in May 2010 within the framework of the OECD Project on Transcontinental...
The present report focuses on the pre-campaign planning, the design, the delivery, and the monitoring and evaluation of National Pension Communication Campaigns in a range of OECD and non-OECD countries. The research identifies barriers to effective communications and highlights models of good practice in order to help organisers design campaigns that are more effective in terms of impact and more...
To adapt pension systems to demographic trends, many countries are reducing pay-as-you-go public pension levels and lifting retirement ages. In this context, funded pensions could play a major role to avoid adequacy gaps. Yet, as this paper shows, the coverage of funded private pensions, as measured by enrolment rates, is highly uneven across countries and between individuals, especially in...
Considering the growing role of private and funded pension provision and the sensitivity of private pension provision to the economic climate, there is an increasing need of comparable and reliable information on private pension plans in order to better monitor retirement income adequacy and the role of private provision in retirement income. Key indicators of the extent to which private pension...
Savings and investments by individuals are important both for personal financial well-being and for economic growth. Many governments try to encourage their citizens to save more, or to save more appropriately, by preferring formal institutions to informal saving and by promoting more diversification. However, there are considerable barriers to saving, including limited access to financial markets...
