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Global Pension Crisis: Unfunded Liabilities and How We Can Fill the Gap

Book Description

A comprehensive look at the crisis of unfunded pension liabilities and what must be done to avoid the same problem in the future

As the generational bubble of the Baby Boomers begins to retire, it is increasingly evident that governments, corporations, and individuals have failed to adequately prepare for the obligations and needs of this giant cohort. Retirees are outliving actuarial life expectancies, pension liabilities are skyrocketing, pension plans are underfunded, and medical costs rise, the United States alone can expect unfunded liabilities to exceed $4 trillion.

Even while the American economy shows signs of sustained recovery, states and local governments will still experience sharp increases in pension fund payments through the next year or longer. Global Pension Crisis looks at this situation and offers practical advice for retirement plan managers and financial advisors, while also explaining how to strengthen pensions and prevent similar crises in the future.

  • Offers a clear and comprehensive explanation of the current pension crisis for retirement fund managers, financial advisors, and economists

  • Includes prescriptive guidance on how to strengthen the pension fund system and prevent another similar crisis

  • Written by venture capitalist, entrepreneur, and former senior Wall Street executive Rich Marin

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Dedication
  6. Foreword
  7. Preface
  8. Acknowledgments
  9. About the Author
  10. Chapter 1: Your Worst Nightmare
    1. THE FAMILY
    2. THE WORK
    3. WHERE DOES THAT LEAVE YOU?
  11. Chapter 2: Dimensioning the Problem
    1. CALCULATING THE SUFFICIENCY OF SAVINGS
  12. Chapter 3: You Can't Build Your Walls High Enough
    1. THE PROBLEM OF RETIREMENT INCOME SECURITY
    2. GENERATIONAL WARFARE OVER THE “PRIVILEGE GAP”
    3. FEEDING THE WORLD
    4. POST-CRISIS POLICY ADJUSTMENTS
    5. THE DEMOGRAPHIC MONSTER STALKING US
  13. Chapter 4: Money Matters
    1. ENTER MODERN PORTFOLIO THEORY
    2. THE SEARCH FOR ALPHA
    3. THE AGE OF DERIVATIVES
    4. THE BIRTH OF HEDGE FUNDS
    5. ALPHA/BETA SEPARATION
    6. THE ORIGINS OF ALPHA
    7. STATIC VERSUS DYNAMIC ASSETS AND LIABILITIES
    8. SUMMING UP
  14. Chapter 5: Reinventing Retirement
    1. DEFINED BENEFIT PLANS
    2. DEFINED CONTRIBUTION PLANS
    3. WHO'S THE CLIENT AFTER ALL?
    4. THE CHANGING LANDSCAPE
    5. THE PERFECT STORM
  15. Chapter 6: Alternatives Are Not Only for the Rich and Famous
    1. PENSION ASSETS AND THE MOVE TOWARD ALTERNATIVE ASSETS
    2. THE GREAT HEDGE FUND DEBATE
    3. THE INSTITUTIONALIZATION OF HEDGE FUNDS
  16. Chapter 7: The Long and the Short of It . . . Trust Me
    1. ALPHA FROM OPERATIONS
    2. OPERATIONAL RISK
    3. SECURITIES LENDING HISTORY
    4. THE SECURITIES LENDING MARKET
    5. SECURITIES LENDING FLOW, PROCESS, AND MECHANICS
    6. RATIO LENDING
    7. THE REHYPOTHECATION TWO-STEP
  17. Chapter 8: Liability-Driven Alpha
    1. PAINTING THE RECENT PENSION LANDSCAPE
    2. RISKS
    3. BASIC LDI GUIDELINES
  18. Chapter 9: Power Tools for Pensions
    1. PENSION BENEFIT GUARANTY CORPORATION
    2. FACTORS AFFECTING THE PBGC INSURANCE PROGRAMS2
    3. PLAN TERMINATIONS
    4. PENSION RISK TRANSFER
    5. SYNTHETIC MUTUAL FUND NOTES
    6. THE ROLE FOR PENSION FUNDS
    7. THE YALE MODEL (THE ILLIQUIDITY PREMIUM) VERSUS THE ALL-WEATHER MODEL
  19. Chapter 10: The Poverty of Nations (Apologies to Adam Smith)
    1. IS THERE A PATH TO SALVATION?
    2. THE CHILEAN TERRARIUM
  20. Chapter 11: The Ultimate Solution
    1. THE NATION, STATE, MUNICIPALITY, AND COMPANY
    2. YOU AS AN INDIVIDUAL
  21. Chapter 12: A Peaceful Night's Sleep
    1. WHAT OUR FAMILY LOOKS LIKE NOW
    2. CONCLUDING THOUGHTS
  22. Works Cited
  23. Index