Speaking in New York on Tuesday, Mr Stevens said with long-term interest rates so low, members of both defined-benefit plans and accumulation arrangements are likely to be "disappointed" when it comes to their retirement incomes.
“Their retirement incomes are in danger of not being fulfilled,” Mr Stevens said.
“It is not a very daring prediction to say that these issues will loom ever larger over the years ahead,” he said.
According to Mr Stevens, while many critics “lay these problems on the door of central banks”, he said central banks are not alone responsible for the decline in long-term interest rates.
He pointed out that real interest rates have been falling since 2007. This is significant, as monetary policy is not supposed to be able to affect real interest rates on a sustained basis.
“Presumably, changes in risk appetite, subdued growth and expectations that growth will continue to be subdued have also played a role in lowering real rates,” Mr Stevens said.
Commenting on the prospects for sustained growth in the future, Mr Stevens said it is “undeniable” that monetary policy alone hasn’t been able to, nor is it able to, generate the growth that markets expect.
“Policies that encourage growth through means other than just ultra-cheap borrowing costs are surely needed.”
"It is surely time that policies beyond central bank actions did more in this regard. Our inability, so far, durably to lift growth prospects is arguably the biggest vulnerability the global financial system faces today. This needs to be our focus."
Mr Stevens added that going forward; central banks need to be clearer about what they can’t do.
“Monetary solutions are for monetary problems. If there are other problems in the underlying working of the economy, central banks won't be able to solve those,” he said.
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