Abstract
There is a worldwide trend to substitute defined contribution pension plans for defined benefit plans, which are typically indexed to wage or price inflation. A problem with this development is that participants in defined contribution plans have limited access or no access at all to inflation-linked assets, especially wage inflation-linked claims. This article demonstrates that the creation of an internal market that swaps equity-related returns for wage inflation-linked income streams helps to overcome the market incompleteness regarding wage-linked securities. The result is an improvement in the welfare of both younger and older defined contribution plan members.
| Original language | English |
|---|---|
| Pages (from-to) | 52-58 |
| Journal | Rotman International Journal of Pension Management |
| Volume | 33 |
| Issue number | 2 |
| Publication status | Published - 2010 |