The World Bank/IFC could issue SeLFIES to fund infrastructure projects in the developing world and help improve retirement security.
Last month, the Government Accountability Office (GAO) issued a stunning report, “The Nation’s Retirement System: A Comprehensive Re-evaluation Is Needed to Better Promote Future Retirement Security” (GAO-18-11SP), on the U.S.’ retirement preparedness. In the report, it notes, “The U.S. retirement system, and the workers and retirees it was designed to help, face major challenges. … individuals are increasingly responsible for planning and managing their own retirement savings accounts … [M]any households are ill-equipped for this task and have little or no retirement savings.” The report ends with a very strong recommendation, or plea, that, “Congress should consider establishing an independent commission to comprehensively examine the U.S. retirement system and … improve how the nation promotes retirement security.” The same is true of all countries globally - especially World Bank member countries.
Coincidentally, the U.S. Treasury also issued a report, “A Financial System That Creates Economic Opportunities,” that makes the case for in-pension plan retirement income options and the importance of funding infrastructure - once again, an important challenge in the developing world. The U.S. government can have an immediate impact on the retirement challenge, create a liquid in-plan retirement income option, and raise funding for infrastructure by issuing a new type of long-term bond, one we call SeLFIES—Standard of Living indexed, Forward-starting, Income-only Securities. SeLFIES address many of the challenges raised in the GAO and U.S. Treasury reports and are also advantageous to the U.S. Treasury. The World Bank/IFC could also issue SeLFIES to fund infrastructure projects in the developing world and help improve retirement security.