Pensions are a major public policy issue – in most countries, they represent a large portion of government fiscal obligations, a burden forecast to increase yet further as the ‘baby boom’ generation approaches retirement. At the same time, private pensions are a major component of financial markets and an important contributor to savings, investment and economic growth.
Pension economics considers the way in which individuals, companies and the state provide for retirement, and the consequences of the accumulating pension assets for the wider macroeconomy. As the global pensions crisis looms, it is essential that everyone working in the pensions industry understand how economics underpins the allocation of scarce resources – both now and in the future – and the incentives influencing this allocation. Pension Economics provides a secure grounding in the theory and practice of economics insofar as it deals with pension matters. From this book readers will learn about the role of pensions:
in maximising individual lifetime welfare
in individual savings and retirement decisions
their consequences from the company’s viewpoint
in promoting aggregate savings
in overlapping generations models
In addition, the book describes the various types of pension plans, covers the economics of ageing and intergenerational accounting and looks at the social welfare implications of pensions.
