Publications

Public Policy Brief Highlights No. 109A | April 2010

The Trouble with Pensions

Toward an Alternative Public Policy to Support Retirement

Pension funds have taken a big hit during the current financial crisis, with losses in the trillions of dollars. In addition, both private and public pensions are experiencing significant funding shortfalls, as is the government-run Pension Benefit Guaranty Corporation, which insures the defined-benefit pension plans of private American companies. Yeva Nersisyan and Senior Scholar L. Randall Wray argue that the employment-based pension system is highly problematic, since the strategy for managing pension funds leads to excessive cost and risk in an effort to achieve above-average returns. The average fund manager, however, will only achieve the risk-free return. The authors therefore advocate expanding Social Security and encouraging private and public pensions to invest only in safe (risk-free) Treasury bonds—which, on average, will beat the net returns on risky assets.


Publication Highlight

One-Pager No. 56
An Alternative to Sovereign Bond-Backed Securities for the Euro Area
Author(s): Mario Tonveronachi
June 2018

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