Understanding Investment Policy Choices for Individual Pension Plans: An Update
Document ID: 2002-734 (previously Report 66)
Published on: 31st May 2002
This report provides a first step to understanding the pensions “lifestyle” problem and designing efficient solutions for savers. We use a stochastic simulation model to map out the benefits likely to be delivered from some conventional investment policies and switching policies. We measure benefits in real and nominal terms and analyse the distribution of final benefits as well as the variability of the built-up benefit. The report was first published in March 1997.
Since then we have made various enhancements to our asset models and there have been some important changes in market levels and interest rates. This paper presents an update, although the reader with a long memory will recognise that the key conclusions from 5 years ago remain intact.
