Prof. Merton and Dr. Muralidhar: Time for Retirement SeLFIES

Visibility: Open to anyone

    To address the looming retirement crisis, many governments are introducing new pension

    programmes tied to employment for uncovered workers (NEST in the UK and Secure Choice in some

    US states). These attempt to improve access to pensions, and continue a trend of transferring

    responsibility for retirement security from governments and employers (via defined benefit [DB]

    plans) to the individual (via defined contribution [DC] plans), as neither governments nor companies

    are willing to bear the liabilities associated with pension obligations. This shift requires new thinking

    about how portfolios are managed and which instruments are available to investors. Our proposed

    SeLFIES (Standard of Living indexed, Forward-starting, Income-only Securities) make individuals

    self-reliant and are also advantageous for governments