This report explores the sustainability of the retirement system. The report defines sustainability as the ability of plan boards and managers to be responsible investors, active stewards, and allocators of capital to economic activities with desirable social and environmental outcomes.
Policy frameworks shape retirement system structures, and together these determine system sustainability. Therefore, to promote sustainability, policymakers should pay closer attention to retirement system structure and policy and adopt measures – including fund consolidation – to promote retirement plans with scale that are well-governed and active when it comes to sustainability issues. Policymakers often ignore the connection between policy, structure, and sustainability when designing private retirement systems. This report examines these challenges in the context of the Australian, UK, and US private retirement systems and makes seven recommendations for policymakers and industry bodies.
The contents of the report include:
Public policy sets the rules of the game. Public policy critically affects the ability of long-term investors to generate sustainable returns and create value.