Can technology ease the dependency crisis created by the demographic time bomb?

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of the Global Talent Competitiveness Index.

The demographic transition is creating a larger pool of older people that retire and become dependent on pension and welfare systems. Could the technology revolution help a reduced pool of younger people sustain such dependency?

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Pensions in Autopilot: restoring financial sustainability without political hassle?

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of the Global Talent Competitiveness Index.

Almost two decades have already passed since the pioneering introduction of Notional Defined Contribution (NDC) pensions in Sweden. What is the balance?

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Economic shocks and generations of people: sharing risks through pension reform

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

People of different generations face different economic realities. Lucky generations may face a brighter economic outlook while the unlucky ones may struggle in getting good jobs and generating wealth. Pension systems can spread economic shocks optimally across generations, if well designed.

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The low-interest Economy and Pension Funds’ Investments

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

Financial stress tests have shown that the financial position of many European pension schemes is precarious. The context of low interest rates, which affects the returns on investments of pension funds, creates problems of underfunding and recent policies of quantitative easing make things even more challenging. What are the implications for funds’ investments?  

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Denmark’s pension system: a champion that adapts

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

Denmark has been able to establish a comprehensive and solvent pension system, often coming out on top of some international rankings such as the Global Pensions Index. Market practices, regulatory objectives and the motivations of people working on the administration of pensions are well aligned. Yet, the system is not free of challenges. Due to market uncertainties and the population aging time bomb adjustments are sometimes needed. The key of the Danish system has been the adaptability of pension providers, who are mobilizing the best talent they have to push the market forward.

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Expectations Matter: self-assessed health and early retirement

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

Although revising upward the age for becoming eligible to old-age pension payments aims to keep people in employment for longer, many people still retire early from labor markets. It is well known that the design of pension systems, and the financial gains implied by it from delaying retirement, have a determinant influence on the decisions of people about when to retire. But monetary calculations is not all that matters. People would take decisions based on expectations about their own health and life expectancy.       

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The old-age economic turnaround: are the elderly favored by national policies?

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

To talk about the economic position of older people in society, at least in some developed countries, is no longer to talk about poverty and relative deprivation but about an astonishing ‘pensioners turnaround’. Newspaper headlines such as “pensioners are enjoying higher incomes than people in work for the first time” are becoming more common (this one comes from The Times). This may raise a few eyebrows in a context in which pension systems are becoming financially unsustainable because of aging populations. There are still many questions to be answered regarding economic fairness across generations.

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Will Germany ‘go Dutch’? Heated debate about collective occupational pensions

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By Eduardo Rodriguez-Montemayor, Economics Department at INSEAD and a Senior Research Fellow of INSEAD’s European Competitiveness Initiative.

Germany, with one of Europe’s most-rapidly aging populations, has surprisingly not been very proactive to reform its pension system. A paternalistic social welfare system with roots in the nineteenth century is still in place. Company pensions have often been seen as a perk, not as a major income-replacement component. This may be about to change if recent proposals to adopt Dutch-style collective funded pension arrangements materialize in 2016 (Germany’s funded pension assets total just 6.3% of GDP compared to over 150% in the Netherlands). Such schemes have the potential to strengthen the German pensions landscape but they present several practical challenges.

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