Pension Design in the Presence of Systemic Risk
Abstract
Individual agents' savings and portfolio choices can have systemic, negative externalities on public finances when a minimum level of retirement consumption is not assured. I discuss optimal policies that prevent such an outcome. Specifically, I show the optimality of two policies funded by optimally determined mandatory savings. The first policy mandates the use of accumulated savings to purchase a claim providing a fixed income stream during retirement. The second policy mandates an appropriately structured portfolio insurance policy. It is also shown that borrowing constraints make it optimal to “backload" mandatory savings towards the end of an agent's work-life.
This event is an Erasmus Finance Seminar. The Erasmus Finance Seminar series brings prominent researchers in Finance from all over the world to Rotterdam.
Information
- Type
- Research Seminar
- Programme
- Finance & Accounting
- Date
- Tue. 17 Dec. 2013
- Time
- 15:30 - 17:00
- Location
- Mandeville Building T03-42
