Income and Household Security
Pensions provide a critical source of income security for workers in their retirement years. The pensions are often long term in nature (60 years or more). The significance of well – managed and well-regulated funds extends beyond the elderly to current workers, who contribute on the basis of an expected future revenue stream. In addition, the increasing transition from DB to DC and to hybrid plans, plus the decrease in state pensions, bears financially on the household sector, which is now more exposed to retirement risks (e. g., investment, market, longevity). Therefore, to date, much of pension fund regulation has focused on the protection of pensioner and employee rights.
Effective oversight in this regard is predicated on ensuring that individual investors have confidence that their savings are secure.4 Notably, trust and confidence on the part of both participants toward the integrity of the provider—be it government or a private entity—are essential components of a well-functioning system. A sound regulatory and supervisory framework can also significantly enhance pensioner security by increasing the long-term security of the funds, ensuring efficiency, and providing considerable freedom of choice in planning options.