This paper reconsiders the predictions of the standard option pricing models in the context of incomplete markets.

China is at a critical juncture in its economic transition. A comprehensive reform of its pension and social security systems is an essential element of a strategy aimed toward achieving a harmonious society and sustainable development.

This paper documents developments in public sector pensions in Australia, and reports estimated unfunded liabilities associated with benefits promised to public sector employees. Australia’s experience with public sector pensions is unusual – currently, the defence forces and the judiciary apart, all new entrants to public sector schemes confront defined contribution (DC) plans. The transition from defined benefit (DB) to DC has taken place over the last 20 years.

China is at a critical juncture in its economic transition. Comprehensive reform of its pension and social security systems is an essential element of a strategy aimed toward achieving a harmonious society and sustainable development. A widely held view among policy makers is that the current approach to pension provision is insufficient to enable China’s economy and population to realize its development objectives in the years ahead.

The 2008 financial crisis sharply reduced the assets and funded levels in state and local pension plans. The drop in funding means that state and local governments have to raise additional revenue to fill the gap.

The 2008 financial crisis sharply reduced the assets and funded levels in state and local pension plans. The drop in funding means that state and local governments have to raise additional revenue to fill the gap. At the same time, the ensuing recession eroded state and local revenues and increased the demand for public services. In response, governments have looked to cut benefits to their workers in order to reduce pension costs.

To adapt pension systems to demographic trends, many countries are reducing pay-as-you-go public pension levels and lifting retirement ages. In this context, funded pensions could play a major role to avoid adequacy gaps. Yet, as this paper shows, the coverage of funded private pensions, as measured by enrolment rates, is highly uneven across countries and between individuals, especially in voluntary systems.

Many EU states have adjusted pension benefits or reformed the pension system in reaction to the recent economic crisis, while other member states have postponed this type of adjustments.

This paper focuses on an explanation for the large shift over the past two decades in the composition of the income of the aged (65+), increasing the role of earned income and reducing the importance of income from their own assets.

We investigate how the shift in private pension coverage from defined benefit (DB) to defined contribution (DC) retirement plans since the 1980s has contributed to the substantial rise in labor force participation of older Americans. We develop a life cycle model of retirement that captures important aspects of private (DB and DC) and public (Social Security Old-Age) pensions.

Monthly Social Security benefits claimed at age 62, rather than 65, are reduced about 20 percent to avoid additional costs to the program. When the reduction was set over 50 years ago, a worker claiming at 62 received benefits about 20 percent longer. As life expectancy has risen, this worker now receives benefits only about 15 percent longer. But the cost of benefits, the present discounted value of lifetime benefits, also depends on interest rates. Rates have generally risen since the 1960s, making future benefits less costly. These higher rates have largely offset the impact of rising life expectancy, suggesting that the reduction factor has proven remarkably durable over time.