Finally, an ideal retirement system should have appropriate governance and oversight to engender confidence in its members. The system’s assets should be held in a separate legal entity which is independent of the government and any employer. The pension plan trustees should have a fiduciary duty to the members of the system as the owners of the assets. Prudential regulation and consumer protection would further secure the systems and various pension plans within it.
Nitin Mehta is managing director of the CFA Institute in Europe, the Middle East and Africa
The looming retirement crisis, though seemingly far on the horizon, has a destructive potential of far greater magnitude.
The government must take the lead by providing an overarching framework and clear objectives.
The total cost of the retirement system will have a significant impact on the investment returns.