Reshaping Retirement Security: Lessons from the Global Financial Crisis

The worldwide financial crisis has wrought deep changes in capital and labor markets, old-age retirement systems, and household retirement and consumption patterns. Confidence has been shaken in both the traditional defined benefit and defined contribution plans. Around the world, plan sponsors, fiduciaries, policymakers, and households have gained a new awareness of retirement risk. When pressed to reform post-crisis, many would recommend enhancing financial advice for plan participants, emphasizing flexibility and the positive effect of working another one or two years to make up for investment losses in the downturn. Adding to this is the continuing need for financial education, essential as the retirement system moves increasingly toward personal account pensions. Perhaps most important of all is the need for greater understanding of risk throughout the retirement security system, along with new approaches to re-engineering retirement pensions. This volume explores the lessons to be learnt for retirement planning and long-term financial security in view of the massive shocks to stock markets, labour markets, and pension plans resulting from the financial crisis. It aims to rethink retirement in the new economic era, including the resilience of defined contribution plans and how defined benefit plans reacted to the financial crisis. Contributors to this volume - Andrew G. Biggs, Resident Scholar, the American Enterprise Institute. Lans Bovenberg, Professor of Economics, Tilburg University. Barbara A. Butrica, Senior Research Associate, the Urban Institute. Jingjing Chai, doctoral student in the Department of Finance, Goethe University, Frankfurt. Robert L. Clark, Professor of Economics and Professor of Management, Innovation, and Entrepreneurship, North Carolina State University. Julia Coronado, Chief Economist - North America, BNP Paribas. Karen Dynan, Vice President, Co-director of the Economic Studies program, and the Robert S. Kerr Senior Fellow, the Brookings Institution. Jason J. Fichtner, Senior Research Fellow, the Mercatus Center, George Mason University. Alan Glickstein, Senior Retirement Consultant, Towers Watson. Eli Greenblum, Member of the Office of the Chief Actuary, The Segal Company. Tomeka Hill, Senior Research Associate, Towers Watson. Michael Hurd, Senior Principal Researcher, RAND, and the Director of the RAND Center for the Study of Aging. Richard W. Johnson, Senior Fellow, the Urban Institute. Raimond Maurer, Endowed Chair of Investment, Portfolio Management, and Pension Finance in the Finance Department, the Goethe University of Frankfurt. Judith F. Mazo, Senior Vice President, The Segal Company. Olivia S. Mitchell, the International Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, the Wharton School, University of Pennsylvania. Theo Nijman, Van Lanschot Professor in Investment Theory, Tilburg University. John W.R. Phillips, Labor Economist, the National Institute on Aging (NIA) Division of Behavioral and Social Research. Ralph Rogalla, Assistant Professor of Finance, Goethe University, Frankfurt. Susann Rohwedder, Senior Economist, RAND. Barbara A. Smith, Senior Economist, the Office of Retirement Policy at the Social Security Administration. Karen E. Smith, Senior Research Associate, The Urban Institute. Ning Tang, Assistant Professor, the Department of Finance, the College of Business Administration, San Diego State University. Stephen P. Utkus, Director, the Vanguard Center for Retirement Research. Mark J. Warshawsky, Director of Retirement Research, Towers Watson. David Wray, President of the Profit sharing/401k Council of America (PSCA).