Pension Funds ́ Challenges after the 2008 Global Crisis: Key Problems for Future Generations

(Pages: 117-125)

Maria Alejandra Caporale Madi*


Green Economics Institute and World Economics Association, Rua Sergipe 627, 01243-001, São Paulo, Brazil.

Abstract:

Pension funds have been playing and will play an outstanding role in the global saving and investment process. However, in spite of the pension funds’ power to centralize huge amount of “retirement savings from workers”, workers do not seem to have a strong defense against the contemporary worldwide trends. By analyzing the impacts of the global scenario on the retirement savings of workers and the future flows of workers’ income, this paper aims to favor a reflection on the pension funds ́ challenges after the 2008 global crisis within OECD countries. Unlike those discussions that consider the short-term market performance, our perspective privileges a long-run perspective. The cutting questions proposed are: How might low interest rates and austerity programs affect the evolution of the workers ́ retirement savings? How might the evolution of benefits and contributions affect the future of pension funds? Why do pension funds ́ allocation strategies give support to short-term business practices within the private equity industry? The paper addresses that it is crucial to rethink the regulation of pension funds in terms of asset allocation and job creation.

Keywords:

Pension funds, financial global crisis, quantitative easing, austerity programs, pension reforms, private equity funds.