Chapter

Chapter Chapter <b>Changing Risks Confronting Pension Participants</b>

Phyllis C. Borzi

in Restructuring Retirement Risks

Published in print August 2006 | ISBN: 9780199204656
Published online September 2006 | e-ISBN: 9780191603822 | DOI: http://dx.doi.org/10.1093/0199204659.003.0004
Chapter  Chapter   Changing Risks Confronting Pension Participants

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The shift from traditional employer-sponsored defined benefit pensions towards individual-account defined contribution plans involves a reallocation of risks and rewards from plan sponsors to employees. While much has been written about the transfer of investment risk and the potential consequences of bad investment choices, less attention has been focused on other potential hazards to retirement security such as the effect of job change and other labour market factors on contribution patterns, the chance of outliving one’s accumulated assets, and the tension between encouraging participants to save for retirement while allowing access to those assets for a variety of other pressing financial needs. This chapter examines these challenges to retirement income security, and identifies several legal and policy changes that might enable participants to cope better with such changes.

Keywords: labour mobility; job change; mortality risk; legal environment; retirement insecurity

Chapter.  7175 words. 

Subjects: Financial Markets

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