Chapter

Understanding Individual Account Guarantees

Olivia S. Mitchell and Kent Smetters

in The Pension Challenge

Published in print November 2003 | ISBN: 9780199266913
Published online August 2004 | e-ISBN: 9780191601323 | DOI: http://dx.doi.org/10.1093/0199266913.003.0008
 Understanding Individual Account Guarantees

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This chapter examines pension guarantees in the context of an individual account (IA) component of a social security reform. The inclusion of IAs in social security reform can strengthen old-age economic security. These accounts reduce the political risk confronting aging Americans when they assess the chances of actually receiving promised benefits, and provide participants with the opportunity to save in a cost-effective manner and diversify their investments.

Keywords: individual account; pension guarantees; pension accounts; social security reform; guarantee design

Chapter.  11797 words.  Illustrated.

Subjects: Financial Markets

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