Today, and over the foreseeable future, a series of events — call them global megatrends — will have a profound impact on the world economy. Each issue of Point of View will share insight into these trends and how the institutional investment community is preparing to address them.
Around the globe, aging populations in industrialized countries are impacting growth, living standards, public policy, public finances, financial markets and international capital flows. Declining ratios of workers to retirees have led to an underfunding of pensions across a range of developed countries. This underfunding has, in turn, led to increased legislation and regulatory changes. For plan sponsors faced with funding issues amid the development of a new paradigm, however, a wide range of potential solutions can be found.
Pension plan sponsors facing the prospects of more retirees living longer in retirement are considering various new investment solutions:
Source: Northern Trust