Portfolio Investment in an Intertemporal Setting [E-Book]: Assessment of the Literature and Policy Implications for Latin American Pension Systems / Guillermo Larrain Rios
Larrain Rios, Guillermo.
Paris : OECD Publishing, 2007
27 p. ; 21 x 29.7cm.
OECD Working Papers on Insurance and Private Pensions ; 10
Finance and Investment
Full Text
Several countries around the globe have established mandatory pension systems based on personal savings accounts. In contrast to the pay-as-you-go (PAYG) financed pensions that these new systems have partly replaced, retirement benefits are the outcome of an investment process. As a result, the choice of investment instruments and the timing of those decisions are crucial determinants of pension benefits. Focusing on this issue, this paper reviews the literature on optimal long-term investment from an individual investors' perspective, assessing the intertemporal portfolio choice problem in a retirement context. The paper then draws lessons for mandatory personal account systems, focusing on the Latin American experience.