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Book reviews for The Journal of Pension Economics and Finance reflect reviewers' own views and in no way represent the views of the institution(s) with which they are affiliated.
Pension systems and reforms may be evaluated according to several benchmarks: economists typically refer to the concepts of financial sustainability, efficiency, and adequacy. Although these concepts are not easily transformed into clear-cut indicators, the empirical literature offers metrics - typically money's worth measures - which, properly interpreted, can provide a good assessment of the underlying characteristics of the systems, and a sound basis for cross-country comparisons. Internal rates of returns, net present value ratios, relative incomes and replacement rates are prominent examples.
This book offers a cross-national assessment of what may be the most elusive concept, namely adequacy of retirement provision. It is a difficult notion because it is very broad, involving individual behavior, institutional outcomes, and the market framework. Individual actions require the capacity to plan ahead, to understand the basics of finance, and to make reasonable decisions in terms of both saving and portfolio allocation, as described in traditional microeconomic life cycle theory, the reference model for assessing retirement saving adequacy. Yet even rational individuals can accumulate wealth poorly/inefficiently when they participate in ill-designed pension schemes or if they...