Recreating Sustainable Retirement

The financial crisis and the ensuing Great Recession alerted those seeking to protect old-age security, about the extreme risks confronting the financial and political institutions comprising our retirement system. The workforce of today and tomorrow must count on longer lives and deferred retirement, while at the same time it is taking on increased responsibility for managing retirement risk. This volume explores new ways to think about, manage, and finance longevity risk, capital market risk, model risk, and regulatory risk. This volume offers an in-depth analysis of the 'black swans' that threaten private and public pensions around the world. Capital market shocks, surprises to longevity, regulatory/political risk, and errors in modelling, will all have profound consequences for stakeholders ranging from pension plan participants, plan sponsors, policymakers, and those who seek to make retirement more resistant. This book analyzes such challenges to retirement sustainability, and it explores ways to better manage and finance them. Insights provided help build retirement systems capable of withstanding what the future will bring.1. Introduction: Recreating Retirement Sustainability ; CAPITAL MARKET AND MODEL RISK ; 2. Managing Capital Market Risk for Retirement ; 3. Implications for Long-term Investors of the Shifting Distribution of Capital Market Returns ; 4. Stress Testing Monte Carlo Assumptions ; LONGEVITY RISK ; 5. Modeling and Management of Longevity Risk ; 6. 1. Longevity Risk Management, Corporate Finance, and Sustainable Pensions ; 7. 1. Model Risk, Mortality Heterogeneity, and Implications for Solvency and Tail Risk ; 8. The Securitization of Longevity Risk and Its Implications for Retirement Security ; REGULATORY AND POLITICAL RISK ; 9. Evolving Roles for Regulators: Toward Better Risk Control? ; 10. Developments in European Pension Regulation: Risks and Challenges ; 11. Extreme Risks and the Retirement Anomaly ; IMPLICATIONS FOR PLAN SPONSORS ; 12. Strategies for Sustainable Defined Benefit Pension Funds ; 13. The Funding Debate: Optimizing Pension Risk within a Corporate Risk Budget