August 2023
18Aug

Uncovering the profile of low earners in the UK and the potential for pension saving through automatic enrolment

By Pensions and lifetime savings association  In the realm of pensions policy, there exists a significant knowledge gap when it comes to understanding and addressing the needs of low earners in the United Kingdom. While various segments of the population have been subject to extensive research, individuals with low incomes who are still engaged in employment have remained relatively understudied. This group represents a complex demographic, comprising diverse subgroups, who may be earning modest incomes for varying reasons and circumstances. The...

August 18, 2023
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July 2023
23Jul

Strengthening Retirement Income Security: Fairer Tax Rules and More Options Needed

By Alexandre Laurin & George Turpie  Simple changes to tax rules can improve retirement security for Canadians, as well as make the retirement system more equitable among different classes of savers, and more efficient at managing longevity risks for capital decumulation. This E-Brief provides a discussion of needed retirement-related tax changes impacting members of capital accumulation plans, such as RRSPs and defined-contribution (DC) plans, divided into the accumulation and decumulation phases. Among the key tax changes recommended for the accumulation phase:...

July 23, 2023
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June 2023
30Jun

Optimal Retirement Portfolios with Fixed and Variable Longevity Annuities in Defined Contribution Plans taking Social Security into Account

By Vanya Horneff, Raimond Maurer & Olivia S. Mitchell  This paper examines how two instruments—annuities with lifelong benefits purchased using defined contribution (DC) plan assets, and social security annuities—should be considered jointly to optimize household lifetime wellbeing. Understanding how these interact is of key importance in order to generate efficient retirement portfolios. Additionally, there is likely to be substantial heterogeneity in the demand for longevity annuities across the retiree population, depending on their assets inside and outside tax-qualified retirement plans,...

June 30, 2023
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16Jun

The Role of IRAs in US Households’ Saving for Retirement, 2022

By Sarah Holden & Daniel Schrass This paper presents survey results on the incidence of individual retirement account (IRA) ownership in the United States and the contribution, rollover, and withdrawal activity of IRA-owning households. IRAs play an important role in US households’ retirement saving: In mid-2022, more than four in 10 US households owned IRAs. Traditional IRAs were the most common type of IRA owned (31 percent of US households), followed by Roth IRAs and employer-sponsored IRAs. IRA-owning households often...

June 16, 2023
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April 2023
21Apr

Retirement Savings Behaviours and Covid-19: Evidence from Thailand

By Paul Gerrans, Sunatharee Lhaopadchan & Sirimon Treepongkaruna This paper utilises administrative data from members of the Thai Government Pension Fund to examine voluntary contributions and investment plan change. We find low overall incidence of both behaviours which increased only modestly during the onset of COVID-19. While the major finding is that members are in the minority if they engage in the behaviour regardless of gender, salary, balance, or experience in the fund, the relative probability varies systematically by member...

April 21, 2023
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21Apr

Shocks to Occupational Pensions and Household Savings

By Francesco Caloia, Mauro Mastrogiacomo & Irene Simonetti This paper studies the saving response of households to shocks in the capital position of their pension fund. Using survey panel data matched to supervisory data of Dutch occupational pension funds for a period that involved three major economic crises, we provide evidence of an increase in savings driven by a worsening of the financial position of pension funds. The identification strategy exploits cross-sectional and time variations in the funding ratios of...

April 21, 2023
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05Apr

How America Saves 2022

By Vanguard Over the past decade, retirement plan sponsors have increasingly turned to automatic solutions to influence employee retirement saving behavior. As a result, plan participation rates have increased, automatic enrollment designs have become stronger, and participant portfolio construction has continued to improve with more age-appropriate asset mixes and less extreme equity allocations. During 2021, the COVID-19 pandemic continued to impact many parts of the economy. While it pushed to recover, the economy faced prominent headwinds that stoked several forms of...

April 5, 2023
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05Apr

Mandatory Pension Contributions: Effects on Household Consumption and Savings

By Linda Sandris Larsen, Ulf Nielsson, Mara Nutu & Jesper Rangvid Using rich register data from Denmark, we study whether people save enough to maintain their pre-retirement level of consumption during retirement. We find that 77% of retirees do. This high fraction is driven by mandatory labour market contributions. The 23% of individuals who do not save enough to maintain their pre-retirement level of consumption are less likely to have mandatory pension schemes and do not compensate for the lack...

April 5, 2023
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March 2023
31Mar

ESG and Climate Change: Pension Fund Dos and Don’ts

By Randy Bauslaugh Pension fund administrators have a fiduciary duty to prudently manage financial risks and opportunities when investing plan assets and when managing plan operations that are paid from the pension fund. This includes the financial risks and opportunities associated with climate change and other environmental, social and governance (ESG) issues. But what are the legal dos and don’ts? Plan fiduciaries will always be on solid legal ground if they take ESG information into account for financial purposes – to...

March 31, 2023
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24Mar

Retirement preparedness during uncertain times

By Fidelity 2023 RSA Executive Summary Fidelity’s Retirement Savings Assessment is built upon comprehensive data from more than 3,500 survey responses that are run through the extensive retirement planning platform Fidelity uses every day with customers. The result: a numerical indicator showing whether savers are on track to meet estimated retirement income needs. The score places households into four categories on the preparedness spectrum, based on a household’s ability to cover estimated retirement expenses in a down market. Read book here

March 24, 2023
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