The Design and Production of New Retirement Savings Products

Abstract

An earlier contribution to this journal implied that protective floor investment strategies in defined-contribution pension investments beat investments in traditional asset mixes, with respect to both the probability of achieving a minimum target level of future pension income and the expected level of future pension income. These commentators show that protective floor strategies may be attractive to loss-averse investors, but they do not beat traditional investments simultaneously on expected pension income and on the probability of achieving the target pension income.