The reviewed book comprises research papers presented at the 2015 Pension Research Council Symposium held at the Wharton School at the University of Pennsylvania. The symposium's aim was to look into the effect of recent changes to the retirement risk management regulatory frameworks. Indeed, responding to the latest financial crisis, lawmakers and regulators have put effort to reform the guidelines for banks and other financial institutions to manage their risks and report their activities. The new rules are having direct and detrimental consequences on retirement systems to both sides, providers and beneficiaries. This edited volume provides insights into the impact of the new regulatory order for non-bank financial entities around the world and provides developments in retirement provision.

Part I of this book focuses on the global risk assessment for pensions and annuities providers of recent changes in regulatory, supervisory, governance, and financial markets. Firstly, Chapter 2 presents an international overview of the insurance supervisory landscape, including North America and Europe. It also analyses the effects of supervisory activities for non-bank financial entities, in particular for insurance companies and pension funds. This chapter offers an exhaustive series of the supervisory structures at multiple geographical levels and their related issues. The author highlights the impact of complex policy objectives on market structure and social welfare. An insufficient coordination throughout geographic markets may compromise capital efficiencies and operating costs, which directly impact negatively annuity providers and retirees. In the same context of standardization and transparency, Chapters 3 and 4 investigate the implications of accounting techniques used by US annuity providers for annuitants, insurers and policymakers. Chapter 3 offers an overview of the different accounting smoothing techniques used in practice and analyses their financial impact for the participating payout life annuity. It shows that for this product, smoothing can be favourable to insurers and consumers by increasing the benefits payments. Chapter 4 explores and promotes the mark-to-market accounting method for defined benefit pensions compared to general accounting principles mainly used in practice. European insurance legislation is discussed in Chapter 5. This chapter offers a broad overview of the risk-based solvency capital regime for the European insurance industry, its developments and features. Furthermore, it investigates regulatory changes and risk disclosure for occupational pension funds. In comparison with the solvency regime for insurers, the author emphasizes the lack of legislation for European pension funds. As pension funds and asset managers are different from banks in terms of their structure and risk profile, Chapter 6 highlights the risks of asset management products to the financial system. The authors outline the discussions around systemic risk, the banking model and its transmission to pension funds.

Part II presents some developments in retirement saving and retirement products. To better identify future needs in retirement provision, it is crucially important to understand how adults prepare financially for old age. Accordingly, Chapter 7 offers a comprehensive analysis for old age saving around the world using rich micro-data. The authors highlight that savings behaviour of individuals depends on personal characteristics such as socioeconomic status, education level and gender. It varies also considerably across economies, it depends on pension coverage and replacement rate. Replacement rate is a common measurement of retirement income that influences future retirees’ saving behaviour. This measure is also used to determine the effectiveness of the pension system. Chapter 8 discusses different methods of replacement rate calculation and its effects on pensions. Using US data, the author shows how important replacement rate calculation method is and how it impacts future retiree income. Seeking also to increase retirement wealth, Chapter 9 proposes a transparent investment strategy, which reduces uncertainty of the wealth at retirement and analyses its related financial cost. This chapter offers a method for determining the amount invested in risky stocks which guarantees an accumulated wealth within fixed bounds. Finally, Chapter 10 discusses pension funds investments, in particular whether private pension funds should invest in alternative assets such as infrastructure projects. This chapter assesses the role of regulations and it analyses driving factors that influence such investments, such as the degree of development in financial markets.

Overall, this book is very informative and easy to read. It is written such that people without prior knowledge of regulatory order can easily understand the related issues. It proposes a wide overview of the new regulations for the retirement system, in particular for North America and Europe. It highlights the issues that annuity providers and pension funds face in the current economic backdrop, and offers a large number of recommendations in term of retirement system risk management. This volume also presents an interesting sample of developments in retirement provision, which is an area of extensive research focus around the world. Through this edition, academics and practitioners discuss topics pertinent to risk management and pension design. I strongly recommend this book to readers of the Journal of Pension Economics and Finance.