New Frontiers In Retirement Investment Decisions

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Stricter accounting rules and an increased regulatory focus on risk management have led corporations to transfer some of the pension-related risks to individuals. As a consequence, the retirement system in most developed countries has experienced a substantial transformation in recent years, with a shift from defined benefit (DB) plans to defined contributions (DC) plans. As a result of this trend, employees must increasingly rely on their own saving and investment decisions to fund their own retirement. This is a serious concern, not only because of the induced risk transfer, but also because individual investors typically lack the expertise needed to implement educated investment decisions.

In response to this concern, the asset management industry has started to look into packaged investment mutual fund products providing investors with dedicated solutions to their long-term investment needs, including “life-cycle” or “target date” funds and “variable annuity” products.

While embedding life-cycle allocation decisions within a one-stop decision is a valuable attempt at providing added-value to unsophisticated investors who are otherwise likely to make sub-optimal decisions, existing products fall short of meeting the challenges posed to individual investors by retirement investment decisions. Drawing on the expertise developed at the Edhec-Risk Institute, this one day seminar equips participants with the technical and conceptual tools that will allow asset managers, pension fund managers, as well as private bankers to develop improved forms of value-added retirement solutions for both the retail and private segments. Complemented with a number of case studies and empirical illustrations, this course provides an in-depth introduction to advanced asset allocation and risk management techniques that seminar participants can use in real world applications.