Let Us Trade Pension Claims

Trading pension claims would kill many birds with one stone: an accurate valuation of pension liabilities would provide a measurable yardstick for plan managers; beneficiaries would be able to diversify the idiosyncratic risk of their plan sponsors; systematic risk could be reallocated to comply with individual risk/return preferences. The consequence would be an alignment of incentives to fully fund plans, lower agency and governmental bail-out costs, and an increase in general welfare