OECD proposes revision of its DC ‘good design’ roadmap
The Organization for Economic Cooperation and Development wants public input on a new roadmap for good design in defined contribution plans.
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The OECD and its Working Party on Private Pensions updated the OECD Roadmap for the Good Design of Defined Contribution Retirement Savings Plans to incorporate recent revisions. The roadmap identifies good design and public policy to help countries to strengthen retirement income adequacy. The initial guidelines were agreed on in 2011 and 2012 and consists of 10 key messages.
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The revised roadmap still has 10 messages but some have been changed.
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One proposed change relates to enrollment, contribution levels and contribution periods. The OECD wants to change the message to read that DC systems should be “as inclusive as possible,” highlighting that policymakers should avoid eligibility criteria that may disadvantage specific cohorts of participants, such as women. The revision also adds language to note that any early access to retirement savings “should be a measure of last resort and based on individuals’ specific hardship circumstances.”
The OECD also proposes absorbing a section focused on annuities and cost-efficient competition in the annuity market into other messages.
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