Innovative institutions and products for retirement provision in Europe

The institutional settings related to pension provision differ widely within Europe. In some countries, income transfers within families are still very important. In other countries, major parts of pension provision are delegated to large financial conglomerates. Some countries rely almost exclusively on public pay-as-you-go (PAYG) systems. In others, private funded pension systems are important. A wide diversity of funded systems exists in Europe. Some countries feature DB (defined benefit) plans in which participation is mandatory, the sponsor absorbs most risks, pension entitlements are paid out as annuities and uniform pension products are offered to all participants. Funded systems in other countries are of the individual DC (defined contribution) type in which participants themselves take all savings and investment decisions and usually face substantial investment, inflation and conversion risk