SeLFIES: A Study of Innovative Securities for Pension Planning

Abstract

This dissertation aims to study the present methodology of pension planning and the feasibility of innovative financial instruments proposed with the goal of better organizing the saving and consumption patterns of present savers and future retirees in accordance with the life-cycle model. Furthermore, it looks into propositions to move away from pay-as-you-go pension systems toward funded ones and the policy considerations involved in the transition. The proposal to introduce new securities known as SeLFIES that can be incorporated into the pension portfolio of a funded pension balance is deemed to be an element of a bigger trend of calls for reform in pension systems that has been widely advocated for by the World Bank in light of the imminent retirement of aging populations and the resulting financial strain that the economy may face.