If retirement income, provided by public and private defined contribution (DC) pension schemes, falls below socially acceptable standards, there is a political risk that consensus-seeker policymakers could yield to pressures to commit future fiscal revenues. These contingent liabilities, when incorporated in markets’ expectations, are bound to create spillovers on sovereign risk, with negative feedback loops on the capital adequacy of banks and of other intermediaries, owing to losses on government paper. Among the causes of reduced annuities out of final assets in DC pension funds is a shrinking equity risk premium, much lower than the values usually advertised by the industry or assumed by policymakers. From a macroprudential perspective, these contingent liabilities and their effects on sovereign risk should be taken into account in stress tests assessing banks’ resilience to financial shocks as well as in financial education programs aimed at boosting pension funds’ membership.

Are defined contribution schemes socially sustainable? A conceptual map from a macroprudential perspective / Marotta, Giuseppe. - In: BANKS AND BANK SYSTEMS. - ISSN 1816-7403. - STAMPA. - 7:(2012), pp. 24-30.

Are defined contribution schemes socially sustainable? A conceptual map from a macroprudential perspective

MAROTTA, Giuseppe
2012

Abstract

If retirement income, provided by public and private defined contribution (DC) pension schemes, falls below socially acceptable standards, there is a political risk that consensus-seeker policymakers could yield to pressures to commit future fiscal revenues. These contingent liabilities, when incorporated in markets’ expectations, are bound to create spillovers on sovereign risk, with negative feedback loops on the capital adequacy of banks and of other intermediaries, owing to losses on government paper. Among the causes of reduced annuities out of final assets in DC pension funds is a shrinking equity risk premium, much lower than the values usually advertised by the industry or assumed by policymakers. From a macroprudential perspective, these contingent liabilities and their effects on sovereign risk should be taken into account in stress tests assessing banks’ resilience to financial shocks as well as in financial education programs aimed at boosting pension funds’ membership.
2012
7
24
30
Are defined contribution schemes socially sustainable? A conceptual map from a macroprudential perspective / Marotta, Giuseppe. - In: BANKS AND BANK SYSTEMS. - ISSN 1816-7403. - STAMPA. - 7:(2012), pp. 24-30.
Marotta, Giuseppe
File in questo prodotto:
File Dimensione Formato  
BBS_en_2012_01_Marotta.pdf

Open access

Tipologia: Versione pubblicata dall'editore
Dimensione 70.66 kB
Formato Adobe PDF
70.66 kB Adobe PDF Visualizza/Apri
Pubblicazioni consigliate

Licenza Creative Commons
I metadati presenti in IRIS UNIMORE sono rilasciati con licenza Creative Commons CC0 1.0 Universal, mentre i file delle pubblicazioni sono rilasciati con licenza Attribuzione 4.0 Internazionale (CC BY 4.0), salvo diversa indicazione.
In caso di violazione di copyright, contattare Supporto Iris

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/703336
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact