Consumer Protection and the Design of the Default Option of a Pan-European Pension Product
76 Pages Posted: 17 Mar 2018 Last revised: 11 Apr 2019
Date Written: February 1, 2018
We address potential strengths and weaknesses of alternative protection schemes, which can be adopted as a ‘default option’ in a private, third pillar, pension product. In light of the observed behavior of savers adopting the ‘default option’ at international level, we perform a comparative analysis aimed at quantifying the costs and the benefits of two different risk mitigation techniques and market-standard investment products available to European consumers. We make the case for eligibility of life-cycle target-date funds as default option for the pan-European pension products.
Keywords: Life-Cycle Saving, Household Finance, Guaranteed Strategies
JEL Classification: G11, D14, D91
Suggested Citation: Suggested Citation