admin, Author at Pension Policy International

04FebFebruary 4, 2017

Technical Review Panel for the Pension Insurance Modeling System (PIMS)

By Olivia S. Mitchell, Christopher Geczy, Robert Novy-Marx, Raimond Maurer, Donald E. Fuerst, Christopher Bone, Donald J. Segal, Martin G. Clarke, Frank J. Fabozzi, Deborah Lucas & David F. Babbel In April of 2013, the Pension Research Council of the Wharton School at the University of Pennsylvania convened a Technical Review Panel, comprising ten experts whose task it was to review the Pension Benefit Guaranty Corporation’s (PBGC) Pension Insurance Modeling System (PIMS), including inputs, outputs, and model assumptions. The review...

February 4, 2017

Articles, Corporate Governance, Pension designInvesting, Labor Market

04FebFebruary 4, 2017

Security of Retirement Benefits in Canada: You Bet Your Life?

By Ronald B. Davis This paper provides a careful review and analysis of employment-based pensions and other post-retirement benefits that may be available to Canadian workers when they retire, with particular emphasis on the extent to which such benefits are vulnerable to unilateral employer alteration or cancellation, and to the risks which arise in the event of the employer's insolvency. Taking stock of key differences between the rights of unionized employees and non-unionized ones, the author argues that the legal...

February 4, 2017

Adequacy, Articles, Labor Market, RegulationInvesting, Regulation

04FebFebruary 4, 2017

Sustainability of Pension Systems in Europe – The Demographic Challenge

By Chris Daykin Fiscal sustainability of pensions is a serious issue in Europe because of the ageing of the population but there is also concern that reformed pensions may not be adequate. Actuaries have always been seen as major players in employer-sponsored pension schemes and insured pensions but have often not been very visible in commenting on public policy issues concerning the pension system as a whole. This article introduces the work being done by the Actuarial Association of Europe...

February 4, 2017

Aging, Articles, Labor MarketCorporate Governance, Regulation

04FebFebruary 4, 2017

How Should the Adequacy of Pension Coverage Be Balanced Against Financial Sustainability?

By Krzysztof Hagemejer & John Woodall In recent decades many countries have “reformed” their contributory pension schemes, generally strengthening the links between benefit entitlements and the contributions paid over members’ working lifetimes, but primarily seeking to (re)balance them financially, in the face of strains arising from unfavourable labour market or demographic conditions. The result has been reduced benefit entitlements and levels of coverage, however assessed. The impact has been felt, particularly, by those with shorter, broken careers (due for example...

February 4, 2017

Adequacy, Articles, System SustainabilityCoverage, Investing, Sustainability

04FebFebruary 4, 2017

Borrowing from the Future: 401(k) Plan Loans and Loan Defaults

By Timothy (Jun) Lu, Olivia S. Mitchell, Stephen P. Utkus & Jean A. Young Tax-qualified retirement plans seek to promote saving for retirement, yet most employers permit pre-retirement access by letting 401(k) participants borrow plan assets. This paper examines who borrows and why, and who defaults on their loans. Our administrative dataset tracks several hundred plans over 5 years, showing that 20% borrow at any given time, and almost 40% do at some point over five years. Employer policies influence...

February 4, 2017

Labor Market, SavingsInvestment, Savings

04FebFebruary 4, 2017

Assessing the Distortions of Mandatory Pensions on Labor Supply Decisions and Human Capital Accumulation: How to Bridge the Gap between Economic Theory and Policy Analysis

By Mukul Rutkowski, David A. Robalino & Andras Bodor Mandatory pension systems play a major role in individual savings and labor supply decisions. In particular, it is well known that defined benefit pension schemes, which are not actuarially fair, can create incentives for early retirement and therefore reduce labor supply and the stock of human capital in a given country. This is an important policy issue in middle-income countries, with still low participation rates in the labor force, where the...

February 4, 2017

Adequacy, Articles, Labor MarketBehavior, Regulation, Sustainability

04FebFebruary 4, 2017

Retirement Security: Better Information on Income Replacement Rates Needed to Help Workers Plan for Retirement

By Charles Jeszeck, Kimberley Granger, Jennifer Gregory, Melinda Bowman & Amrita Sen What GAO Found: Household spending patterns varied by age, with mid-career households (those aged 45-49) spending more than older households. For example, according to 2013 survey data from the Bureau of Labor Statistics (BLS), mid-career households spent an estimated average of around $58,500, while young retiree households (those aged 65-69) spent about 20 percent less. While the share of spending was consistent for some categories, other categories had...

February 4, 2017

Adequacy, Articles, Labor MarketFinancial Education, Labor Market, Replacement Rate

04FebFebruary 4, 2017

Are ‘Voluntary’ Self-Employed Better Prepared for Retirement than ‘Forced’ Self-Employed? The Case of the Netherlands and Germany

By Douglas Hershey, Hendrik van Dalen, Weiteke Conen & Kene Henkens When it comes to financial preparation for retirement, self-employed workers in many European countries face unique challenges not encountered by traditional wage earners. This is particularly true for self-employed workers who do not supervise subordinate personnel. This is the case because many self-employed individuals in nations such as the Netherlands and Germany do not have large-scale access to employer-sponsored pensions, which are a mainstay of pension support for most...

February 4, 2017

Adequacy, Articles, Labor Market, Pension designManagement, Sustainability

04FebFebruary 4, 2017

Adequacy, Fairness and Sustainability of Pay-as-You-Go-Pension-Systems: Defined Benefit Versus Defined Contribution

By Jennifer Alonso-García, María el Carmen Boado-Penas & Pierre Devolder There are three main challenges facing public pension systems. First, pension systems need to provide an adequate income for pensioners in the retirement phase. Second, participants wish a fair level of benefits in relation to the contributions paid. Last but no least, the pension system would need to be financially sustainable in the long run. In this paper, we analyse defined benefit versus defined contribution schemes in terms of adequacy,...

February 4, 2017

Adequacy, Articles, System SustainabilityManagement, Regulation

04FebFebruary 4, 2017

Default Investment Strategies in a Defined Contribution Pension System: A Pension Risk Model Application for the Chilean Case

By Félix Villatoro, Solange Berstein & Olga Fuentes In a defined contribution pension system, one of the main risks faced by members refers to the investment of funds. In this context, we discuss which is the most suitable risk measurement for the affiliates to the pension system. Different life-cycle investment strategies are evaluated under this measure for different types of workers. We point out the importance of designing well-suited default investment options in light of the economic behavior of members,...

February 4, 2017

Articles, Regulation, SupervisionRegulation, Sustainability

February 2017