OECD Pensions Outlook 2018
The 2018 edition of the OECD Pensions Outlook examines how pension systems are adapting to improve retirement outcomes. It focuses on designing funded pensions and assesses how different pension arrangements can be combined taking into account various policy objectives and risks involved in saving for retirement. It looks at how countries can improve the design of financial incentives, and presents policy guidelines on aligning charges and costs of providing funded pensions.
This edition also draws lessons from nationally significant investment institutions on strengthening the governance, investment policies and investment risk management of pension funds. It provides guidelines on improving retirement incomes considering behavioural biases and limited levels of financial knowledge, and discusses the implications of mortality differences on retirement incomes across different socioeconomic groups. Lastly, it examines whether survivor pensions are still needed.
Pension costs in the accumulation phase: Policy options to improve outcomes in funded private pensions
This chapter examines policy measures implemented in different jurisdictions to help align the charges levied by pension providers on scheme members, sponsors and employers with the cost of the services provided, as well as ways to improve outcomes for members and sponsors. These policy measures have been introduced because market mechanisms alone have often been insufficient to achieve this goal. Aligning charges and costs is important as both visible charges – the fees paid to providers by different parties – and unreported charges – deductions from pension portfolios to pay suppliers such as asset managers – reduce the overall value of the pension pot. The most common policy response, improving transparency of charges and costs, works best when accompanied by additional measures such as pricing regulation or structural solutions. The chapter also considers how disclosure initiatives and pricing regulation can include benchmarking and performance-related fee structures to improve outcomes for members and sponsors.