“The tectonic plates of governance reform have totally transformed the landscape of governance in publicly traded corporations. Now, Ambachtsheer challenges the owners of those corporations, the institutional investors, to examine themselves and to reform their own fiduciary practices.”
―David Beatty, Managing Director, Canadian Coalition for Good Governance, Canada
“I discovered Keith Ambachtsheer’s cutting-edge ideas and thinking a decade ago, and only wish I had discovered him sooner. Ambachtsheer offers intelligent and practical strategic thinking about pension governance, benefit design, and investment policy. If you are struggling with the pension crisis, you owe it to yourself to read the Pension Revolution.”
―David Blitzstein, Director, Negotiated Benefits Department, United Food & Commercial Workers International Union, U.S.A.
“Retirement plans are a critical part of both the social systems and the financial systems of the free world. They are failing on both counts. Turning failure to success will be no mean task, and there is no better place to begin than Pension Revolution. It demands your attention.”
―Jack Bogle, Founder and Former CEO, The Vanguard Group, U.S.A.
“Over the years, Keith Ambachtsheer has triggered pension funds around the world with ground breaking initiatives like CEM and his insightful ‘Ambachtsheer Letters.’ This book is no exception to this impressive tradition. The issues raised in this book should be in the forefront of the minds of trustees, pension professionals and regulators. Pension Revolution will definitely be one of the key contributions to the pension debate and the challenge to design sustainable pension systems.”
―Else Bos, CEO, PGGM Investments, The Netherlands
“Yet another revolution in pensions! This one is about the very future of private pensions, their design, benefits, funding and the distribution of risk. As we would expect from Keith Ambachtsheer, this book combines perceptive and informed assessment of the issues with a way forward. This is nothing short of Drucker’s world re-written for the twenty-first century.”
―Gordon Clark, Professor of Geography and Director of the Oxford University Centre for the Environment, Oxford University,U.K.
“Financing retirement income has reached crisis proportions around the world. Keith has thought as much as anyone about how to best redeem and redefine societies’ vital, yet frail structures for delivering income to workers once they retire. Here in one place you get the benefit of that accumulated wisdom.”
―Richard Ennis, Co-founder and Chairman, Ennis Knupp + Associates, U.S.A., and Editor, Financial Analysts Journal
“I have known and worked with Keith for many years and look forward to the next chapter in his analysis of the pension fund business. I anticipate a thought provoking “solution” which will no doubt impact how many of us think about our business going forward.”
―Nancy Everett, President and Chief Executive Officer, General Motors Asset Management, U.S.A.
“While I don’t necessarily agree with all of Keith’s pension revolution conclusions and proposed solutions, I do believe there is great value in seriously considering the issues. This thought-provoking book makes a substantial contribution to promoting that highly desirable end result.”
―Gary Findlay, Executive Director, Missouri State Employees’ Retirement System, U.S.A.
“A cure for pension ills? Founded on problems so well defined and incorporating relevant factors so well described in his earlier works, Keith’s Pension Revolution is surely an excellent prescription. Whether it is a cure is up to those of us with oversight responsibilities.”
―Michael Grandin, Corporate Director and former Dean, Haskayne School of Business, University of Calgary, Canada
“Keith Ambachtsheer is one of the few pension thinkers consistently worth (re-)reading. His writings push all stakeholders towards clarity of purpose, governance, measurement, expression, and execution. Ineluctably his TOPS model offers a new vision for future pension deals.”
―Jack Gray, Global Investment Strategist, GMO Australia Limited and Advisor to Sunsuper, Australia
“When it comes to investment and pension funds, Keith has spend more time than anyone thinking, researching, writing and talking about how to get better investment performance and pension outcomes. Pension systems around the world are at a crossroad. The book is a must read for decision makers as well as plan participants.”
―Claude Lamoureux, President & Chief Executive Officer, Ontario Teachers’ Pension Plan, Canada
“No one in the world knows more about Pension Funds than Keith Ambachtsheer. Pension Revolution exactly elucidates the causes of the global pension crisis and offers a comprehensive blueprint for pension reform.”
―Burton Malkiel, Professsor of Economics, Princeton University, U.S.A., and author of “A Random Walk Down Wall Street”
“As a keen reader of Keith’s ‘Ambachtsheer Letters’, I know his writings to be thought-provoking, bar-raising, and innovative. His new book is a ‘must-read’ for anyone involved in pension fund management. Putting his ideas in practice will benefit pension plan members around the world.”
―Roderick Munsters, Chief Investment Officer, ABP Pensionfund, The Netherlands
From the Inside Flap
Pension systems in the developed world are becoming increasingly risky propositions. More and more workers reach retirement age expecting lifetime security, only to find little more than empty promises and IOUs in their retirement packages.
How did we get here? And, more importantly, what must we do now to rethink, revamp, and revolutionize our failing pension systems?
Pension Revolution features a point-by-point analysis of the reasons for today’s unfolding pensions crisis. Written by award-winning and globally recognized pension and investment analyst Keith Ambachtsheer, this well-researched exploration provides members of the business, labor, government, and professional communities with a timely, insightful look at everything from pension design, organizational structure, and investment beliefs, to risk management, performance measurement, and results disclosure. Its 46 chapters ask hard questions and provide workable solutions, including:
- What Australia and several European nations are doing to radically reshape the pension paradigm through both legislative and regulatory actions
- The dangers of using a return assumption with an embedded risk premium to value pension promises
- Strategies for using a “game theory” framework to design collaborative pension plans destined to remain collaborative
- How three highly successful pension plans combine optimal value and strong governance for their stakeholders
- Why decisions based on the “capital asset pricing model,” long accepted as gospel by devotees of long-term stock market investing, can be dangerously wrong-headed
But more than just exposing the flaws of today’s pension approaches, Pension Revolution proposes a new arrangementthe revolutionary and practical TOPS (The Optimal Pension System) approach. The TOPS approach, currently in use by only a handful of successful plans including the highly respected TIAA-CREF system in the United States, effectively controls costs and conflicts while creating a new class of informed, independent, long-horizon investors. Pension Revolution provides a step-by-step primer on how and why TOPS represents the future of responsive, responsible pension plan design and management, and what you can do to install TOPS-style effectiveness into your own program.
As decades of ineffective pension fund governance runs up against the hard reality of today’s burgeoning class of retirees, traditional pension plans are living on borrowed dollars and borrowed time. Pension Revolution explains what decision-makers can and must dostarting todayto reverse this dangerous course, and place the provision of retirement income for millions of workers on a sustainable track.
From the Back Cover
Pension systems in the developed world are becoming increasingly risky propositions. More and more workers reach retirement age expecting lifetime security, only to find little more than empty promises and IOUs in their retirement packages.
How did we get here? And, more importantly, what must we do now to rethink, revamp, and revolutionize our failing pension systems?
Pension Revolution features a point-by-point analysis of the reasons for today’s unfolding pensions crisis. Written by award-winning and globally recognized pension and investment analyst Keith Ambachtsheer, this well-researched exploration provides members of the business, labor, government, and professional communities with a timely, insightful look at everything from pension design, organizational structure, and investment beliefs, to risk management, performance measurement, and results disclosure. Its 46 chapters ask hard questions and provide workable solutions, including:
- What Australia and several European nations are doing to radically reshape the pension paradigm through both legislative and regulatory actions
- The dangers of using a return assumption with an embedded risk premium to value pension promises
- Strategies for using a “game theory” framework to design collaborative pension plans destined to remain collaborative
- How three highly successful pension plans combine optimal value and strong governance for their stakeholders
- Why decisions based on the “capital asset pricing model,” long accepted as gospel by devotees of long-term stock market investing, can be dangerously wrong-headed
But more than just exposing the flaws of today’s pension approaches, Pension Revolution proposes a new arrangement the revolutionary and practical TOPS (The Optimal Pension System) approach. The TOPS approach, currently in use by only a handful of successful plans including the highly respected TIAA-CREF system in the United States, effectively controls costs and conflicts while creating a new class of informed, independent, long-horizon investors. Pension Revolution provides a step-by-step primer on how and why TOPS represents the future of responsive, responsible pension plan design and management, and what you can do to install TOPS-style effectiveness into your own program.
As decades of ineffective pension fund governance runs up against the hard reality of today’s burgeoning class of retirees, traditional pension plans are living on borrowed dollars and borrowed time. Pension Revolution explains what decision-makers can and must do starting today to reverse this dangerous course, and place the provision of retirement income for millions of workers on a sustainable track.
About the Author
KEITH P. AMBACHTSHEER is the Director of the Rotman International Centre for Pension Management at the University of Toronto and founder of KPA Advisory Services, Ltd. He is an award-winning analyst of pensions and investment issues who advises governments, industry associations, pension plan sponsors, and money managers on pension governance, finance, and investment. His advisory publication, the Ambachtsheer Letter, regularly reaches 150 different institutional clients across the world. Ambachtsheer is also a cofounder of CEM Benchmarking Inc., which monitors the management quality of 300 of the world’s largest DB and DC pension funds. He is the coauthor of Pension Fund Excellence: Creating Value for Stakeholders (Wiley).
Wow! eBook
