30 March 2023 Multimedia

Practitioners' Insights: Retirement Security Bonds—A Capital Markets Solution for Better Pensions

  1. Arun Muralidhar, PhD
  2. Sivananth Ramachandran, CFA, CIPM
The 2022 Mercer CFA Institute Global Pensions Index ranked India 41 out of 44 countries studied.

Retirement systems in India and many other emerging market are dominated by defined contribution plans and lack adequate social security nets. As a result, individuals must make complex decisions on investment amounts, rates of return, and even how much they can safely withdraw during retirement—and mostly must do so without access to high-quality financial advice.

Most of the available retirement instruments tackle only some of the issues. With a properly designed instrument, it is possible not only to meaningfully address the pensions needs of individuals but also to mobilise large, long-term domestic savings and direct it towards productive assets, such as infrastructure.

Nobel Laureate Robert Merton and Arun Muralidhar have proposed such an instrument: Retirement Security Bonds (RSBs). An RSB is a single, liquid, low-cost, low-risk (government-issued) instrument that embeds accumulation, withdrawals, compounding, and inflation adjustments, making it suitable for even the most financially unsophisticated individual. Recently, the Brazilian government has adopted this concept with their RENDA+ bonds.

In this webinar, Arun Muralidhar will outline the common challenges with retirement, explain how existing instruments tackle some but not all of these challenges, and discuss how properly designed instruments like RSBs can address retirement security issues.

Learning Outcomes

  • Learn about traditional challenges with retirement security.
  • Discuss conventional solutions and how they tackle this challenge.
  • Examine how RSBs work, and their adoption in Brazil.
  • Evaluate a path forward for markets.
  • This is the archived version of a live webinar that took place on 30 March 2023

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