Pension risk in DC funds

Defined contribution plans focus too much on the short-term accumulation of pension assets rather than the longer-term goal of securing an adequate retirement income.

This paper by the World Bank, based on case studies from a number of countries, argues that pension supervisors have not properly defined the objectives of DC pension systems

It suggests that in order to have a meaningful impact on future pensions, the supervision of DC systems needs to take a more proactive role in minimising pension risk.

This objective would require ensuring that investment risks are aligned with the probability of achieving a target pension at retirement age.

To access the paper click below

Pension risk and risk-based supervision in DC pension funds