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After completing this course, the students understand the main issues related to the design and reform of pension systems have a good overview of the actual pension systems and main reform issues around the world. Naturally the ongoing reform of the Dutch pension system gets additional attention.
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Students will become familiar with the concepts of Intergenerational distribution, Behavioral aspects of pensions, Intragenerational distribution, Lifecycle investing and Risk sharing, in the context of pensions. More in particular, the students will become familiar with the following topics, related to the main issues:
Intergenerational distribution:
- Goals of pension systems
- Funding versus pay-as-you-go financing
- Generational accounting
Behavioral aspects of pensions:
- Saving behavior
- Investing behavior
- Behavioral lessons for pension contract design
- Heterogeneity in participants characteristics and uniform products
Intragenerational distribution:
- Actuarial neutrality
- Labor markets and retirement decisions
- Insurance of longevity risk
- Tax treatment of pensions
Lifecycle investing:
- Optimal saving and investment over the life cycle
- Role of investment beliefs in design of lifecycle paths
- Optimal investing and drawdown in the decumulation phase
Risk sharing:
- Pooling of idiosyncratic risks
- Optimal sharing of systematic risks
- Capital market imperfections and valuation of pensions
- Strengths and weaknesses of individuals, pension funds and governments
- Defined-benefit and defined contribution schemes
Applications:
- Pension institutions around the world
- Pension reform in the Netherlands
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