For this reason, the region could utilize the accumulated foreign reserves to mitigate abrupt exchange rate volatility. Depending on the type of shocks, the scale of changes in foreign exchange rates, and the size of foreign reserves, policy responses vary widely across the region.
It is not clear that future pensioners will accept lower benefits, even though they are currently taking on more risk. The government – and ultimately taxpayers – may end up as "pension providers of last resort". The task of bolstering the pension system to withstand pressures from lower rates and higher dependency ratios cannot be delegated to the individual pension saver.