This article reviews the literature on the optimal design and regulation of funded pension schemes. We first characterize optimal saving and investment over an individual's life cycle. Within a stylized modeling framework, we explore optimal individual saving and investing behavior....

This paper evaluates approximation methods to make manageable the numerical solution of overlapping generation models with aggregate risk. The paper starts with a model in which households maximize expected utility over their life cycle. Instantaneous utility is characterized by constant...

Privatization of public pension schemes, partial or complete, is on the political agenda in many countries. In the Netherlands, the discussion focuses on second-pillar pension schemes. Although these schemes are funded, they feature intergenerational risk sharing. This paper documents the...