Reforming pensions to protect adequate and sustainable benefits

Pension design is a challenge for many countries. Additionally, many people make bad choices, not saving enough, making bad investment decisions, paying high administrative charges, and/or retiring too soon. Nicholas Barr writes that exposure to risk must decline with age, changes must be phased in gradually, and there must be no shocks for workers close to retirement. He recommends offering workers a choice architecture with fewer options. His research has shaped Sweden and Finland’s initiatives to strengthen long-term financial stability in their pension systems.