Pensions and Retirement Training Course on Indexation Policies for Benefits

Module 1: Fundamentals of Pension Benefit Indexation
Concept and importance of benefit indexation
Inflation risk and the erosion of real retirement income
Historical evolution of indexation practices in public and private pensions
Fixed, ad-hoc, and automatic indexation: comparative overview
Relationship between inflation, wage growth, and pension adjustments
Case study: Comparing CPI and wage-based indexation in OECD pension systems

Module 2: Indexation Formulas and Economic Indicators
Common indexation formulas: CPI, wage-linked, hybrid, and discretionary models
Data sources and index selection criteria
Handling volatility and data lags in inflation reporting
Designing hybrid indexation mechanisms for balanced outcomes
Application of smoothing and caps to control volatility
Practical exercise: Developing an indexation formula using CPI and wage growth

Module 3: Financial and Actuarial Implications of Indexation
Impact of indexation on actuarial valuations and funding requirements
Modeling long-term liabilities under different indexation assumptions
Accounting implications under IFRS and IPSAS standards
Effect of indexation on contribution rates and benefit adequacy
Sensitivity analysis and risk modeling for indexation adjustments
Simulation: Testing indexation impact on pension fund solvency over 30 years

Module 4: Governance, Regulation, and Policy Considerations
Legal frameworks governing pension indexation
Transparency and fairness in determining indexation adjustments
Trustee responsibilities in approving and communicating benefit increases
Managing conflicts between affordability and member expectations
Regulatory oversight and reporting standards for indexation policies
Workshop: Reviewing indexation clauses in pension scheme documents

Module 5: Strategic Implementation and Communication
Policy formulation and stakeholder engagement in indexation decisions
Integrating indexation with investment strategy and asset-liability management
Communicating indexation outcomes to members and retirees
Monitoring and reviewing the effectiveness of indexation policies
Global lessons from inflationary and deflationary environments
Group project: Designing an indexation policy for a sustainable pension plan