Reshaping Retirement Security: Lessons from the Global Financial Crisis

The worldwide financial crisis has wrought deep changes in capital and labor markets, old-age retirement systems, and household retirement and consumption patterns. Around the world, plan sponsors, fiduciaries, policymakers, and households have gained a new awareness of retirement risk. When pressed to reform postcrisis, many would recommend enhancing financial advice for plan participants, emphasizing flexibility and the positive effect of working another one or two years to make up for investment losses in the downturn. Adding to this is the continuing need for financial education, essential as the retirement system moves increasingly toward personal account pensions. But perhaps most important of all is the need for greater understanding of risk throughout the retirement security system, along with new approaches to reengineering retirement pensions.