Rethinking Pension Reform

This book presents perspectives on managing pension funds and clarifies the international debate on social security.

Franco Modigliani (Author), Arun Muralidhar (Author)

9780521676533, Cambridge University Press

Paperback, published 22 August 2005

266 pages, 39 tables
22.9 x 15.2 x 1.4 cm, 0.36 kg

'… makes a significant contribution to the growing literature on public pension reform … valuable theoretical lessons for pension reformers of all stripes … The authors' approach is imaginative and their economic analysis, as expected, is first-rate … Rethinking Pension Reform represents a significant contribution to the continuing debate over public pension reform, and it constitutes a fitting legacy for its distinguished co-author.' Journal of Pension, Economics, and Finance

This book presents an academic and a practical aspect on managing pension funds to clarify the global debate on social security. The authors establish the basic choices in designating any system to help policy makers develop the system that achieves their many objectives. They examine reforms in Latin America to highlight flaws and to estimate the true cost of these reforms and factors affecting these costs. The authors then discuss how the United States and Spain can implement robust systems incorporating many of the ideal features. The success of reforms depends on financial innovation to mitigate key risks and some innovations are discussed, which also demonstrates how pension reform choices affect the achievement of retirement objectives. Finally, the authors examine some proposed hybrid options to show how the beneficial features of these hybrids can be captured through good design in a single fund.

1. A primer on pension reform issues
2. A taxonomy of pension reform issues
3. Evaluation of pension reforms
4. Welfare costs defined contribution schemes
5. The transition from PAYGO to funding with a common portfolio: application to the United States
6. Social security reform in Spain
7. The 'two pension fund' theorem
8. The case for mixed systems and variable contributions: improving the performance of pension systems.

Subject Areas: Pensions [KFFP], Finance [KFF], Finance & accounting [KF], Economics [KC]