The hardest problem in finance is becoming pensions' defining challenge

Hugh Cutler says there is not yet a settled industry answer to the decumulation challenge

clock • 5 min read
Hugh Cutler: The structural shift from DB to DC has already transferred a significant burden from institutions to individuals; the decumulation challenge is where that transfer becomes most acute.
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Hugh Cutler: The structural shift from DB to DC has already transferred a significant burden from institutions to individuals; the decumulation challenge is where that transfer becomes most acute.

US economist Bill Sharpe once described decumulation as "the nastiest, hardest problem in finance".

Coming from the creator of the Sharpe ratio and a Nobel laureate, it is a striking remark, and one that captures a reality now central to UK pensions policy and practice. For decades, the indust...

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