Recovery Potential for DC Pension Plans
In this project, we want to focus on the uncertain pension wealth for participants in a pure DC system. We want to use a real (=inflation linked) annuity as a benchmark for the “pension ambition” of a participant. This choice for the benchmark is used to quantify to what extent a participant can maintain his or her standard of living after retirement. The utility at retirement is determined by comparing the pension wealth at retirement with this benchmark. Our main research question is therefore: When we start from underfunded situation, how much recovery (relative to a real annuity) can a participant (realistically) expect?
Read the paper here.