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These papers, including ones presented earlier this morning, raise questions about an adequate regime of consumer protection in an era in which responsibility for retirement savings and investment decisionmaking is being devolved, increasingly, to individuals. This shift to individual responsibility has also characterized many Social Security reform proposals, previously a bedrock system of publicly determined benefit levels. I find this devolution troubling; I think it is odd for individuals to have this responsibility. Individuals are not good risk bearers of market volatility, both in a financial sense and in a psychological sense. The consequence is that unless individuals are locked into all equity portfolios, as Professor Weiss has suggested, they are likely to pick inefficient portfolios that will not serve their long-term interests. The evidence from current investment of 401(k) plans and other self-directed regiment plans is that individuals tend to underweight equity and correspondingly overweight fixed-income securities despite long-term horizons of retirement savings. Thus, under present institutional arrangements, the devolution trend is likely to erode the retirement security and comfort of tomorrow's retirees.


Business Organizations Law | Law