1/3: The case for a funded pension with a defined benefit (DB)

I begin by drawing attention to the efficiencies in the pooling of longevity and investment risk that collective funded pension schemes provide over individual defined contribution (IDC) pension pots in guarding against your risk of living too long. I then turn to an analysis of those collective schemes that promise a defined benefit (DB): an inflation-proof income in retirement until death, specified as a fraction of your salary earned during your career. I consider the concepts and principles within and beyond financial economics that underlie the valuation and funding of such a pension promise. I assess the merits of the ‘actuarial approach’ to funding an open, ongoing, enduring DB scheme at a low rate of contributions invested in ‘return-seeking’ equities and property. I also consider the merits of the contrasting ‘financial economics approach’, which calls for a higher rate of contributions set as the cost of bonds that ‘match’ the liabilities. I draw on the real-world case of the UK’s multi-employer Universities Superannuation Scheme (USS) to adjudicate between these approaches. The contrasting investment strategy of London’s SAUL pension scheme, the objectives of the Pensions Regulator, the significance of the Pension Protection Fund, and the decision of Trinity College Cambridge to withdraw from USS to protect itself against being the ‘last man standing’, all figure in the discussion.

Lecture 2: The case for collective defined contribution (CDC)
On any sensible approach to the valuation of a DB scheme, ineliminable risk will remain that returns on a portfolio weighted towards return-seeking equities and property will fall significantly short of fully funding the DB pension promise. On the actuarial approach, this risk is deemed sufficiently low that it is reasonable and prudent to take in the case of an open scheme that will be cashflow positive for many decades. But if they deem the risk so low, shouldn’t scheme members who advocate such an approach be willing to put their money where their mouth is, by agreeing to bear at least some of this downside risk through a reduction in their pensions if returns are not good enough to achieve full funding? Some such conditionality would simply involve a return to the practices of DB pension schemes during their heyday three and more decades ago. The subsequent hardening of the pension promise has hastened the demise of DB. The target pensions of collective defined contribution (CDC) might provide a means of preserving the benefits of collective pensions, in a manner that is more cost effective for all than any form of defined benefit promise. In one form of CDC, the risks are collectively pooled across generations. In another form, they are collectively pooled only among the members of each age cohorts.

Lecture 3: The case for an unfunded pay as you go (PAYG) pension

The previous two lectures grappled with various challenges that funded collective pension schemes face. In the final lecture, I ask whether an unfunded ‘pay as you go’ (PAYG) approach might provide a solution. With PAYG, money is directly transferred from those who are currently working to pay the pensions of those who are currently retired. Rather than drawing from a pension fund consisting of a portfolio of financial assets, these pensions are paid out of the Treasury’s coffers. The pension one is entitled to in retirement is often, however, a function of, even though not funded by, the pensions contributions one has made during one’s working life. I explore the extent to which a PAYG pension can be justified as a form of indirect reciprocity that cascades down generations. This contrasts with a redistributive concern to mitigate the inequality between those who are young, healthy, able-bodied, and productive and those who are elderly, infirm, and out of work. I explore claims inspired by Ken Binmore and Joseph Heath that PAYG pensions in which each generation pays the pensions of the previous generation can be justified as in mutually advantageous Nash equilibrium. I also discuss the relevance to the case for PAYG of Thomas Piketty’s claim that r > g, where “r” is the rate of return on capital and “g” is the rate of growth of the economy.

This unusual online event will see Alberto Guibilini (Research Fellow, Uehiro Centre for Practical Ethics) and David Jones (Director, The Anscombe Bioethics Centre) adopting the other’s position on conscientious objection, arguing for the opposing view in an attempt to explore not only the subject, but the very nature of disagreement and discussion. Audience members will be encouraged to explore their views on conscientious objection in the same way.

We welcome questions in advance of the debate. To register on Zoom for the event please use the following link: https://us02web.zoom.us/webinar/register/WN_VrOGfqNrQVmw9k2KFz9HOA

This event is co-sponsored by the Anscombe Bioethics Centre in Oxford. It will start promptly at 6pm, and we expect to finish at 7:30pm.

Jointly organised by the Oxford Uehiro Centre for Practical Ethics and the Anscombe Bioethics Centre. This unusual online event will see Alberto Guibilini and David Jones adopting the other’s position on conscientious objection, arguing for the opposing view in an attempt to explore not only the subject, but the very nature of disagreement and discussion. Audience members will be encouraged to explore their views on conscientious objection in the same way.

Leadership in Extraordinary Times: SmartSpace: the new frontier

How will the commercialisation of space impact our everyday lives?

The world faces many challenges, climate change, racism and the pandemic. There are also many great opportunities that will benefit us all. How can business harness the enormous potential the commercialisation of space offers, and what will it deliver in terms of benefits here on earth?

We have brought together experts in the field to share their experience where business, innovation and entrepreneurship meet. They will look at what the future holds for those who work in this area or are about to embark on a career in it.

The event will be hosted by Marc Ventresca, Associate Professor of Strategic Management and the panel will be moderated by Lucas Kello, Associate Professor of International Relations at Oxford and an expert in space, and cyber governance.

Panel

Eamonn Molloy, Associate Fellow Oxford, expert in major programs
Renee Rottner, Assistant Professor UC Santa Barbara, expert in NASA innovation
Dan Sola, Space entrepreneur and Oxford Said alumni
Lucy Edge, Chief Operating Officer of Satellite Applications Catapult
Greg Autry, Vice President of Space Development, and Board member at the National Space Society

Visit https://www.sbs.ox.ac.uk/oxford-answers/smartspace-new-frontier at the specified time to watch the live stream. A recording will be posted on the website when the broadcast finishes.

How do you build inclusion from the ground up?

People with albinism face discrimination across the globe but are often left out of activist efforts around diversity and inclusion.

In this episode, we speak to representatives of Sesame Street Workshop, who have been championing diversity for years. With a breadth of expertise in the art of embracing diversity, this insightful look into the world of Sesame Street gives us new ways of approaching our goals. Supermodel and activist Diandra Forrest also joins the conversation. Fellow guest speaker Stephan Bognar, Executive Director of New York Dermatology Group Foundation, completes the line-up. They worked together previously on the Colorfull campaign, which was conceived by NYDG to highlight the prejudice that albinism attracts.

With COVID-19 vaccines on the horizon, attention again returns to the contentious topic of whether vaccination should be made mandatory.

Recent polling has resulted in worrying headlines about a lack of willingness to have a COVID-19 vaccine if it were available.

Are mandates the answer to ensure vaccine high uptake to end the pandemic? While still a hypothetical scenario, without yet having a safe and effective vaccine approved for use, this could change in the coming months. The question of introducing mandatory vaccination spans considerations of personal liberty, health decision-making, public health and policy, as well as the relationship between the state and its citizens. Join Professor Julian Savulescu and Dr Samantha Vanderslott to debate the ethical and public policy arguments for and against mandatory COVID-19 vaccination.

Join Peter Drobac as he interviews Paul Farmer, in an exploration of the lessons we can learn from Paul Farmer’s phenomenal new book, Fevers, feuds and diamonds: Ebola and the ravages of history.

We will reflect on how these lessons can help us tackle the current Covid-19 pandemic and discuss how inequality and exploitation fuelled the spread of a deadly virus and how we might finally learn from history, in order to build a healthier, more equitable world.

For more details, visit https://www.sbs.ox.ac.uk/events/fevers-feuds-and-diamonds-dr-paul-farmer-future-global-health

Join us live or watch the recording on: https://www.sbs.ox.ac.uk/oxford-answers

This event and open to all Registration not required.

Daniel Burt presents the board games created — and played with the public — during the Literary History of Medicine project, looks at the wider process of creating games, and reveals how they can be used to engage everyone with what we discover through academic research.

What can we call a science? And what makes it science? Dr Taha Yasin Arslan of Medeniyet University, Istanbul challenges us to rethink the history of science, proposing new definitions for the term “science”.

Join us — and share your ideas.
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‘Microscopy and Magnetic Materials: Exploring Energy Landscapes at the Nanoscale’ by Professor Amanda Petford-Long FREng (Argonne National Laboratory and Northwestern University.

The Department of Materials is delighted to host this virtual event by our alumna, Professor Petford-Long. Please email communications@materials.ox.ac.uk to register, and to receive the Team Live link to log-on to this free event.

The first discussion in the Oxford Net Zero Series, hosted by the Oxford Martin School, hones in on the fundamental motivation of the research programme: ‘Why net zero?’.

Join the Oxford Net Zero Initiative’s Research Director, Professor Sam Fankhauser; Director, Professor Myles Allen; Net Zero Policy Engagement Fellow, Kaya Axelsson as they discuss with the Chair, Executive Director. Dr Steve Smith, the meaning of the word ‘net’ in net zero, reviewing what is needed to mitigate global warming, as and before we fully phase out activities that generate greenhouse gas emissions.

The discussion will explore the framing opportunities and challenges that the term ‘net-zero’ offers for science, policy, and advocacy informing effective climate action, as well as the innovation required at scale to achieve the global goal.

To register and watch this talk live: www.crowdcast.io/e/net-zero-when-and-how

The talk will also be streamed via YouTube here: https://youtu.be/z6049wR0tfE, but please note you will not be able to take part in the interactive Q&A session unless you join the talk on CrowdCast.

Covid-19 killed around two million people in 2020. At the same time, the social and economic impact of the pandemic led to an 8% reduction in greenhouse gas emissions, the biggest one-year decline on record.

As the pandemic is brought under control from 2021 onwards, by supplementing current control methods with vaccination, there are big opportunities to sustain the benefits of lower emissions for health and well-being. The direct benefits are fewer droughts, floods, heatwaves, storms and wildfires, and cleaner air. Indirect health benefits are expected from better nutrition, safe sanitation, energy-efficient health services, and jobs in the green economy, among others.

In this conversation, Sir Andy Haines (Professor of Environmental Change and Public Health, London School of Hygiene & Tropical Medicine) and Chris Dye (Professor of Epidemiology, University of Oxford) consider how better health and well-being are an both argument for, and a consequence of, making progress towards “net zero” carbon emissions.

To register and watch this talk live: www.crowdcast.io/e/building-back-healthier

The talk will also be streamed via YouTube here: https://youtu.be/xy3xkB9q8Ds, but please note you will not be able to take part in the interactive Q&A session unless you join the talk on CrowdCast.

The failure to stem the tide of biodiversity loss, or to address the deeply related issue of climate change, demands we quickly find more ambitious and more coherent approaches to tackling these challenges.

Nature-based Solutions (NbS) are one such family of approaches that has recently gained prominence in international policy and business discourse. Broadly defined as actions that involve working with nature to address societal goals, NbS are being widely hailed as a win-win for addressing biodiversity loss and climate change. However, this win-win scenario is not guaranteed.

Some NbS – particularly those involving planting trees in naturally treeless habitats – can have negative outcomes for climate change mitigation, biodiversity and local peoples’ livelihoods. There are also critical questions around the timeframes over which NbS can help tackle the biodiversity and climate crises given the negative impacts of warming on the health of the biosphere.

In the second discussion in the Oxford Net Zero Series, hosted by the Oxford Martin School, Professor Nathalie Seddon, will bring together interdisciplinary researchers and practitioners to explore the value and limits of working with nature to address climate change and why NbS must both support biodiversity and be implemented with, by and for people, if they are to provide benefits over the longterm.

To register and watch this talk live: www.crowdcast.io/e/nature-climate-change

The talk will also be streamed via YouTube here: https://youtu.be/Ka7Sc5d1v3k, but please note you will not be able to take part in the interactive Q&A session unless you join the talk on CrowdCast.