Foresight No. 14: Pensions in a High-Rate World (full note, PDF)

Foresight, prospective note No. 14. Driss EFFINA, PhD. October 2026. PDF, 28 pages, 15 charts and diagrams, 11 tables.

For fifteen years pension systems in the rich world were built around a single price: a real long-term interest rate close to zero. That price has gone. Across the United States, the United Kingdom, France, Germany and Canada, a simple proxy for the real ten-year yield averaged -0.30 percent in 2015 to 2019 and 2.35 percent in September 2026, after the 2026 oil shock pushed nominal ten-year yields to 4.99 percent in the United States and 5.24 percent in the United Kingdom.

Inside the full note:

• The high-rate world in numbers
• Five systems, three ways of valuing a promise
• The duration-gap model
• Accounting versus economics: the plans that hide their gain
• Savers and retirees
• Slow-moving books: French savings and German reserves
• The risks: liquidity, private valuations and a reversal
• Losers outside the funds: housing-rich retirees and taxpayers
• Winners and losers: a matrix
• Four scenarios to 2035
• Leading indicators dashboard
• Implications for policy and for investors
• What to watch

Read the free preview: Pensions in a High-Rate World.