The National Pension Hub is looking to support research that addresses at least one of the following topics:
Plan Design and Plan Adequacy
The boomer generation has just entered retirement. Population aging paired with a prolonged low interest rate environment has put the sustainability of pension arrangements in many Western countries under pressure. Moreover, future demographic changes may have a significant impact on capital markets, labor markets and long-term economic growth. Consequently, sustainable pension plan design that maintains pension income adequacy and meets comfortable retirement income targets is top of mind for the NPH.
The ambition of this theme is to conduct academic research to help better understand the risk factors that drive uncertainties around future pension plan adequacy. This theme aims to provide more detailed and scientific insight on income adequacy both before and during retirement. This will require more adequate modelling of the uncertainties surrounding life expectancy, financial markets, policy changes and the response of individuals and institutions to each.
Private Market Risk Assessment
Investments in privately-traded assets like private equity, real estate, and infrastructure, and private debt have grown tremendously in recent decades. Despite this growth, little is known about the risks and returns of these investments, the costs and benefits of holding them in a diversified portfolio, and whether they introduce moral hazard or agency issues. The NPH is seeking proposals for funded research that fills these gaps. Data on NPH members’ holdings of private market assets may be available for some topics.
Impact and Use of Leverage
The NPH is interested in supporting research that investigates the use of leverage across pension plans globally, the role of leverage and how it impacts portfolio construction and risk taking, and whether there is an ‘optimal’ leverage ratio.
Pension fund managers face unique challenges in constructing their portfolios and managing their risk due to the long-term nature of their liabilities and heterogeneity of their beneficiaries. The NPH seeks proposals for research that addresses these challenges.
In addition to these four main research topics, research focused on the governance of pension organizations and the impact of governance on plan performance may also be of interest to the NPH.
To download the full National Pension Hub Research Agenda, please click the link below: