Voltaire, the French writer and philosopher, advised a friend to “go on living solely to enrage
those who are paying your annuities”, before suggesting rhubarb and sobriety as the means to such an end. The rapid ageing of the population around the world is unlikely to be a result of heeding this advice. But it provides a major challenge to the affordability of pensions and the financial sustainability of retirement-income systems. This problem has been reinforced by a long period during which increases in life expectancy were continually under-estimated by experts.

It is estimated that transitioning to a low-carbon, and climate resilient economy, and more broadly „greening growth? over the next 20 years to 2030 will require significant investment and consequently private sources of capital on a much larger scale than previously. With their USD 28 trillion in assets, pension funds - along with other institutional investors - potentially have an important role to play in financing such green growth initiatives.

According to data from the Bureau of Labor Statistics, nearly one in three men between ages 55 and 61 did not work in January 2011 (US). This statistic includes men who were unemployed and looking for work, as well as those who were no longer in the labor force or never worked. Although the share of nonworking older men increased dramatically because of job losses created by the Great Recession, it has been steadily on the rise since 1990 when only around one in four older men was not working.

The ageing of society demands action as the window of opportunity to adequately prepare for this shift is closing fast. While immediate concerns about rising healthcare costs and pension structures require attention, fundamental longterm questions should not be neglected. Although the current global economic turmoil has put further pressure on already stretched resources, heightening the urgency of addressing demographic shifts, it is also presenting a once-in-a-generation opportunity for transformational change. Times of uncertainty create space for radical and creative thinking, and now may be an ideal time to attempt reform while people are more open than ever to new ideas.

Populations around the world are ageing rapidly, not only in the advanced economies but also in the emerging and developing economies. The UN predicts that by 2050, one-third of the populations in developed countries and one-fifth of those in developing countries will be aged 60
or older.

Individuals save for decades to ensure that they will have financial security in retirement. That security can be threatened or eliminated virtually overnight if an individual who is in or near retirement becomes the victim of a financial fraud, such as a Ponzi scheme or sham investment in high-yield securities.

The lack of a secure income in older age is one of the biggest problems facing people in developing countries. Few people in poverty can afford to save for older age and family support for older people is under pressure. Around the world, the majority of older people lack a secure income, and fewer than one in five people over 60 receive a pension. The best way to tackle this problem is for governments to provide non-contributory (‘social’) pensions, as more than 80 governments around the world have done including Nepal, Bolivia, South Africa and Brazil.

In light of the consequence of ageing populations in virtually all countries and increasing government debt in many countries, retirement income systems are coming under greater scrutiny than ever before. Notwithstanding the great diversity of policies towards pensions around the world, it is important that comparisons are made and lessons are learned from the range of approaches. This report presents such research and compares retirement income systems in 16 countries, representing more than half the world’s population.

This is the sixth edition of the Pensions Universe Risk Profile (The Purple Book), a joint annual publication by the Pension Protection Fund (the PPF) and the Pensions Regulator (the regulator) which focuses on the risks faced by defined benefit (DB) pension schemes, predominantly in the private sector.

A period of protracted low interest rates is a feasible, even if not the most likely, scenario going forward and such a scenario would adversely affect pension funds and insurance companies. Protracted low interest rates affect investment opportunities and have a potentially significant adverse effect on life insurance companies and institutions whose liabilities consist of a fixed investment return or benefit promises, such as is the case for defined-benefit pension funds. It cannot be ruled out that the financial institutions affected engage in “gambling for redemption” in an attempt to match the level of return promised to beneficiaries when financial markets were more elevated.

This paper examines the role of guarantees in DC pension plans, in particular minimum investment return guarantees during the accumulation phase. The main goal is to assess the cost and benefits of different return guarantees.

Until recently, people with Defined Contribution (DC) pension savings were effectively required by Government regulations to purchase an annuity with their pension fund by the time they reached age 75. Since April 2011 the Government has lifted the effective requirement to annuitise. This Briefing Note summaries the main findings of a PPI research report, which estimates the number of people who might be able to take advantage of the new flexible options for accessing private DC pension savings and explores the possible impact of this policy change on low, median and high earners.