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Regulation of Retirement Saving

A Squam Lake Working Group Paper

Author: Squam Lake Working Group on Financial Regulation

Regulation of  Retirement Saving - regulation-of-retirement-saving

Publisher Council on Foreign Relations Press

Release Date July 2009

8 pages


Retirement saving is undergoing a fundamental change as employers shift from defined benefit pension plans to defined contribution plans, such as 401(k) accounts. Defined contribution plans have important advantages: they allow households to customize their retirement saving to their own risk preferences and circumstances, they insulate pensioners from potential bankruptcies of their employers, and although there may be a modest vesting period, they allow workers to move from job to job without risking their pensions. These plans also place much greater burdens on consumers to make good financial decisions. But there is widespread concern that many households are not up to the task. This Working Paper, the sixth in the Squam Lake Working Group series distributed by the Center for Geoeconomic Studies, analyzes this concern and recommends measures that will improve the performance of the nation's retirement saving system.

More About This Publication

The Squam Lake Working Group on Financial Regulation is a nonpartisan, nonaffiliated group of fifteen academics who have come together to offer guidance on the reform of financial regulation.

The group first convened in fall 2008, amid the deepening capital markets crisis. Although informed by this crisis—its events and the ongoing policy responses—the group is intentionally focused on longer-term issues. It aspires to help guide reform of capital markets—their structure, function, and regulation. This guidance is based on the group's collective academic, private sector, and public policy experience.

To achieve its goal, the Squam Lake Working Group is developing a set of principles and their implications that are aimed at different parts of the financial system: at individual firms, at financial firms collectively, and at the linkages that connect financial firms to the broader economy.

The members of the group are

Martin N. Baily
Brookings Institution

Andrew B. Bernard
Dartmouth College

John Y. Campbell
Harvard University

John H. Cochrane
University of Chicago

Douglas W. Diamond
University of Chicago

Darrell Duffie
Stanford University

Kenneth R. French
Dartmouth College

Anil K Kashyap
University of Chicago

Frederic S. Mishkin
Columbia University

Raghuram G. Rajan
University of Chicago

David S. Scharfstein
Harvard University

Robert J. Shiller
Yale University

Hyun Song Shin
Princeton University

Matthew J. Slaughter
Dartmouth College

René M. Stulz
Ohio State University

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