Pensions are a major public policy issue - in most countries, they represent a large portion of government fiscal obligations, a burden forecast to increase yet further as the 'baby boom' generation approaches retirement. At the same time, private pensions are a major component of financial markets and an important contributor to savings, investment and economic growth. Pension Economics considers the way in which individuals, companies and the state provide for retirement, and the consequences of the accumulating pension assets for the wider macroeconomy. As the global pensions crisis looms,…mehr
Pensions are a major public policy issue - in most countries, they represent a large portion of government fiscal obligations, a burden forecast to increase yet further as the 'baby boom' generation approaches retirement. At the same time, private pensions are a major component of financial markets and an important contributor to savings, investment and economic growth. Pension Economics considers the way in which individuals, companies and the state provide for retirement, and the consequences of the accumulating pension assets for the wider macroeconomy. As the global pensions crisis looms, it is essential that everyone working in the pensions industry understand how economics underpins the allocation of scarce resources - both now and in the future - and the incentives influencing this allocation. Pension Economics provides a secure grounding in the theory and practice of economics insofar as it deals with pension matters. From this book readers will learn about the role of pensions: * in maximising individual lifetime welfare * in individual savings and retirement decisions * their consequences from the company's viewpoint * in promoting aggregate savings * in overlapping generations models In addition, the book describes the various types of pension plans, covers the economics of ageing and intergenerational accounting and looks at the social welfare implications of pensions. It ends with a discussion of behavioural pension economics.Hinweis: Dieser Artikel kann nur an eine deutsche Lieferadresse ausgeliefert werden.
Dr DAVID BLAKE is Professor of Pension Economics and Director of the Pensions Institute at Cass Business School, London, and Chairman of Square Mile Consultants, a training and research consultancy. He was formerly Director of the Securities Industry Programme at City University Business School, Research Fellow at both the London Business School and the London School of Economics and Professor of Financial Economics at Birkbeck College, University of London. He is consultant to many organisations, including Merrill Lynch, Deutsche Bank, Union Bank of Switzerland, JPMorgan, McKinsey & Co., the Financial Services Authority, the Office of Fair Trading, the Office for National Statistics, the Government Actuary's Department, the National Audit Office, the Department for Work and Pensions, HM Treasury, the Bank of England, the Prime Minister's Policy Directorate and the World Bank. In June 1996, he established the Pensions Institute, which undertakes high-quality research on all pension-related issues and publishes details of its research activities on the internet (http://www.pensions-institute.org).
Inhaltsangabe
Preface xi 1 Introduction 1.1 What is pension economics? 1 1.2 Types of pension scheme 3 1.3 Conclusions 10 Questions 10 References 11 2 Individual Pension Decision Making 13 2.1 The lifecycle model 13 2.2 Pensions and savings 19 2.2.1 Unfunded state pension 19 2.2.2 Private funded pension 20 2.3 Pensions and retirement decisions 23 2.3.1 No pension 23 2.3.2 Private funded pension 24 2.3.3 Unfunded state pension 25 2.3.4 Unfunded state pension with private funded pension 26 2.4 Empirical studies testing the validity of the lifecycle model 28 2.5 The Feldstein lifecycle model with induced retirement 30 2.5.1 The consumption decision 32 2.5.2 Retirement behaviour 37 2.5.3 Discussion 38 2.6 Conclusions 39 Questions 40 References 41 3 Corporate Pension Decision Making 47 3.1 The provision of pensions by corporations 47 3.2 The role of pensions in employment contracts 48 3.2.1 Pensions as altruism 48 3.2.2 Pensions as deferred pay 49 3.2.3 Pensions as contingent claims 60 3.3 The nature of corporate pension liabilities 61 3.4 Quitting and mandatory retirement 64 3.4.1 Quitting 64 3.4.2 Mandatory retirement 66 3.5 Tax and pension fund policy 68 3.6 Agency costs in pension schemes and pension funds 71 3.6.1 Insider-trustees 72 3.6.2 Underfunding the pension scheme 75 3.6.3 Performance-related fund management fees 80 3.6.4 Shareholder activism and corporate governance 81 3.6.5 Moral hazard, adverse selection and disability pensions 82 3.7 Conclusions 83 Questions 84 References 85 4 Pensions in the Diamond-Samuelson Overlapping Generations Model with Certain Lifetimes 89 4.1 The two-period Diamond-Samuelson OLG model 90 4.1.1 Individuals 91 4.1.2 Firms 98 4.1.3 Market equilibrium 100 4.1.4 Dynamics, stability and the steady state 101 4.1.5 Optimality and efficiency 103 4.2 Pensions in the Diamond-Samuelson OLG model with exogenous labour supply and retirement 105 4.2.1 State pension scheme 106 4.2.2 The equivalence of PAYG and government debt 117 4.2.3 Transitional and welfare effects 120 4.2.4 From PAYG to a funded pension scheme 121 4.3 PAYG pensions in the Diamond-Samuelson OLG model with endogenous labour supply and retirement 122 4.3.1 Individuals 122 4.3.2 Market equilibrium 125 4.3.3 The steady state 126 4.3.4 Welfare effects 129 4.3.5 From PAYG to a funded pension scheme 132 4.4 Conclusions 132 Questions 133 References 135 5 Pensions in the Blanchard-Yaari Overlapping Generations Model with Uncertain Lifetimes 137 5.1 The Blanchard-Yaari OLG model with uncertain lifetimes 137 5.1.1 Yaari's contribution 137 5.1.2 Blanchard's contribution 142 5.1.3 Individuals 142 5.1.4 Aggregate consumption 144 5.1.5 Firms 147 5.1.6 Government and market equilibrium 148 5.1.7 The phase diagram 149 5.2 PAYG pensions in the Blanchard-Yaari OLG model with endogenous labour supply and mandatory retirement 152 5.3 Conclusions 154 Questions 155 References 156 6 The Economics of Ageing and Generational Accounting 157 6.1 The macroeconomic effects of ageing: Declining population growth and the increasing dependency ratio 157 6.2 Pensions in the Diamond-Samuelson OLG model with a variable population growth rate 161 6.3 Generational accounting 164 6.4 Conclusions 167 Questions 168 References 168 7 Risk Sharing and Redistribution in Pension Schemes 171 7.1 Risks in private pension schemes 174 7.2 Risk sharing in personal pension schemes 175 7.3 Risk sharing in occupational pension schemes 177 7.3.1 Complete markets 178 7.3.2 Incomplete markets 180 7.4 Redistribution in private pension schemes 188 7.5 Private sector market failure and the compensating role of state pension schemes 191 7.6 Risks in state pension schemes 192 7.7 Risk sharing in state pension schemes 196 7.7.1 The family 197 7.7.2 Social security pension system 198 7.8 Redistribution in state pension schemes 206 7.9 The viability of PAYG state pension systems and the transition costs to funding 206 7.9.1 Viability 206 7.9.2 The transition deficit 210 7.10 Conclusions 213 Questions 215 References 217 8 Behavioural Pension Economics 221 8.1 The accumulation phase 222 8.1.1 The savings decision 222 8.1.2 The investment decision 227 8.2 The decumulation phase 238 8.2.1 Longevity risk 238 8.2.2 Inflation and capital market risk 239 8.3 Conclusions 240 Questions 242 References 243 Index 249
Preface xi 1 Introduction 1.1 What is pension economics? 1 1.2 Types of pension scheme 3 1.3 Conclusions 10 Questions 10 References 11 2 Individual Pension Decision Making 13 2.1 The lifecycle model 13 2.2 Pensions and savings 19 2.2.1 Unfunded state pension 19 2.2.2 Private funded pension 20 2.3 Pensions and retirement decisions 23 2.3.1 No pension 23 2.3.2 Private funded pension 24 2.3.3 Unfunded state pension 25 2.3.4 Unfunded state pension with private funded pension 26 2.4 Empirical studies testing the validity of the lifecycle model 28 2.5 The Feldstein lifecycle model with induced retirement 30 2.5.1 The consumption decision 32 2.5.2 Retirement behaviour 37 2.5.3 Discussion 38 2.6 Conclusions 39 Questions 40 References 41 3 Corporate Pension Decision Making 47 3.1 The provision of pensions by corporations 47 3.2 The role of pensions in employment contracts 48 3.2.1 Pensions as altruism 48 3.2.2 Pensions as deferred pay 49 3.2.3 Pensions as contingent claims 60 3.3 The nature of corporate pension liabilities 61 3.4 Quitting and mandatory retirement 64 3.4.1 Quitting 64 3.4.2 Mandatory retirement 66 3.5 Tax and pension fund policy 68 3.6 Agency costs in pension schemes and pension funds 71 3.6.1 Insider-trustees 72 3.6.2 Underfunding the pension scheme 75 3.6.3 Performance-related fund management fees 80 3.6.4 Shareholder activism and corporate governance 81 3.6.5 Moral hazard, adverse selection and disability pensions 82 3.7 Conclusions 83 Questions 84 References 85 4 Pensions in the Diamond-Samuelson Overlapping Generations Model with Certain Lifetimes 89 4.1 The two-period Diamond-Samuelson OLG model 90 4.1.1 Individuals 91 4.1.2 Firms 98 4.1.3 Market equilibrium 100 4.1.4 Dynamics, stability and the steady state 101 4.1.5 Optimality and efficiency 103 4.2 Pensions in the Diamond-Samuelson OLG model with exogenous labour supply and retirement 105 4.2.1 State pension scheme 106 4.2.2 The equivalence of PAYG and government debt 117 4.2.3 Transitional and welfare effects 120 4.2.4 From PAYG to a funded pension scheme 121 4.3 PAYG pensions in the Diamond-Samuelson OLG model with endogenous labour supply and retirement 122 4.3.1 Individuals 122 4.3.2 Market equilibrium 125 4.3.3 The steady state 126 4.3.4 Welfare effects 129 4.3.5 From PAYG to a funded pension scheme 132 4.4 Conclusions 132 Questions 133 References 135 5 Pensions in the Blanchard-Yaari Overlapping Generations Model with Uncertain Lifetimes 137 5.1 The Blanchard-Yaari OLG model with uncertain lifetimes 137 5.1.1 Yaari's contribution 137 5.1.2 Blanchard's contribution 142 5.1.3 Individuals 142 5.1.4 Aggregate consumption 144 5.1.5 Firms 147 5.1.6 Government and market equilibrium 148 5.1.7 The phase diagram 149 5.2 PAYG pensions in the Blanchard-Yaari OLG model with endogenous labour supply and mandatory retirement 152 5.3 Conclusions 154 Questions 155 References 156 6 The Economics of Ageing and Generational Accounting 157 6.1 The macroeconomic effects of ageing: Declining population growth and the increasing dependency ratio 157 6.2 Pensions in the Diamond-Samuelson OLG model with a variable population growth rate 161 6.3 Generational accounting 164 6.4 Conclusions 167 Questions 168 References 168 7 Risk Sharing and Redistribution in Pension Schemes 171 7.1 Risks in private pension schemes 174 7.2 Risk sharing in personal pension schemes 175 7.3 Risk sharing in occupational pension schemes 177 7.3.1 Complete markets 178 7.3.2 Incomplete markets 180 7.4 Redistribution in private pension schemes 188 7.5 Private sector market failure and the compensating role of state pension schemes 191 7.6 Risks in state pension schemes 192 7.7 Risk sharing in state pension schemes 196 7.7.1 The family 197 7.7.2 Social security pension system 198 7.8 Redistribution in state pension schemes 206 7.9 The viability of PAYG state pension systems and the transition costs to funding 206 7.9.1 Viability 206 7.9.2 The transition deficit 210 7.10 Conclusions 213 Questions 215 References 217 8 Behavioural Pension Economics 221 8.1 The accumulation phase 222 8.1.1 The savings decision 222 8.1.2 The investment decision 227 8.2 The decumulation phase 238 8.2.1 Longevity risk 238 8.2.2 Inflation and capital market risk 239 8.3 Conclusions 240 Questions 242 References 243 Index 249
Rezensionen
"I have never seen such a concise description of pensioninstitutions that was so crystal clear." (Investments &Pensions Europe, February 2007)
"Informative without being patronizing and set out in a logicalsequence with each chapter containing questions to help the readerconsolidate what they have just learnt." (Pensions Age,December 2006)
"If you are looking for a solid grounding in the theory andpractice of economics in relation to pensions this is a vitaladdition to your bookshelf." (.net, August 2007)
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