January 2024
19Jan

PPF 7800 Index

By Pension Protection Fund The PPF 7800 Index tracks the level of underfunding risk in the PPF-eligible universe using the latest scheme return information provided to The Pensions Regulator and the roll- forward methodology used for PPF levy purposes. There are certain simplifications within the levy calculation, as described in note 4 on page 7 of this document, that should be borne in mind when interpreting these results. In particular, the assets and liabilities have not been reduced for benefit...

January 19, 2024
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19Jan

Pension Funding Index January 2024

By Zorast Wadia The funded status of the country’s 100 largest corporate pension plans, as measured by the Milliman 100 Pension Funding Index (PFI), experienced a modest improvement in 2023, driven by annual investment returns of 9.94%. Declining discount rates, particularly in the fourth quarter, and the corresponding liability (i.e., the projected benefit obligation) increase of 8.33% served to partially offset the asset gains, resulting in a funded status improvement of $4 billion for the year. This gain paled in...

January 19, 2024
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19Jan

Inter-Generational Spillovers in Labor Supply: Evidence from a Danish Retirement Reform

By Malene C. F. Laczek In this paper, I study how the labor supply of one generation affects the next. Utilizing longitudinal Danish register data and a large retirement reform, I document that parents’ retirement significantly affects the labor supply of their adult children. This inter-generational link is driven solely by mothers. Concretely, mothers’ retirement permanently increases their adult children’s income rank by 7 income rank points, driven by increased hours worked, participation in the labor force, improved occupational rank,...

January 19, 2024
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19Jan

Social Security and Inequality in Belgium

By Giulia Klinges, Alain Jousten & Mathieu Lefebvre Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused...

January 19, 2024
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19Jan

Occupations Shape Retirement Across Countries

By Philip Sauré, Arthur Seibold, Elizaveta Smorodenkova & Hosny Zoabi We study how occupations shape individual and aggregate retirement behavior. First, we document large differences in individual retirement ages across occupations in U.S. data. We then show that retirement behavior among European workers is strongly correlated with U.S. occupational retirement ages, indicating an inherent association between occupations and retirement that is present across institutional settings. Finally, we find that occupational composition is an important determinant of aggregate retirement behavior across...

January 19, 2024
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12Jan

Fast Facts & Figures About Social Security, 2023

By Social Security Administration  People contribute to Social Security through payroll taxes or self-employment taxes, as required by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). The maximum taxable amount is updated annually on the basis of increases in the average wage. Of the 181 million workers with earnings in Social Security–covered employment in 2022, about 7% had earnings that equaled or exceeded the maximum amount subject to taxes, compared with 3% when the program began...

January 12, 2024
Books, Books, Reports, System Characterization,
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12Jan

The State of Pensions 2023: Year End Update

By Anthony Randazzo & Jonathan Moddy  In 2023, U.S. public pension funds remain fragile. According to Equable Institute’sState of Pensions 2023 report, state and municipal retirement systems are on track to miss their investment targets and are unlikely to see meaningful improvements in their unfunded liabilities or funded ratio in 2023. In this post, we will look at pension funding trends and detail the health of pension funds in an increasingly unpredictable market and where risky investments are more popular than ever....

January 12, 2024
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12Jan

Between Individual Risk and State Responsibility: 20 Years of Swedish Premium Pensions

By Anika Seemann  In 2000, the Swedish pension reform of 1998 led to the introduction of a capital-funded pension component with individual investment accounts in the first pillar of the pension system, known as the premium pension. This article takes the 20th anniversary of the Swedish premium pension as an opportunity for a fundamental evaluation. It shows which guiding principles the premium pension system was founded on when it was introduced, which problems have arisen since its introduction, how the...

January 12, 2024
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12Jan

Pension Systems (Un)Sustainability and Fiscal Constraints: A Comparative Analysis

By Michael Wickens  Using an overlapping generations model, two new indicators of public pension system sustainability are proposed: the pension space, which measures the capacity to pay for pension expenditures out of labour taxation, and the pension space exhaustion probability reflecting demographic uncertainties. These measures reveal that the pension spaces of advanced economies are strikingly different. Most nations have little scope to further finance pensions out of labour income  taxation over the next thirty years. There is no one-size-fits-all solution....

January 12, 2024
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12Jan

The Fiscal Cost of Aging in Belgium: Pensions and Healthcare

By Jean-Jacques Hallaert Belgium faces a fiscal consolidation challenge at a time when the fiscal cost of aging—primarily related to pension and health outlays—is mounting. Pension spending will increase relatively fast unless a combination of measures related to pension generosity and retirement eligibility are put in place. Potential efficiency gains are large in the health sector and could absorb part of the fiscal and reorganization costs related to an aging population. Source SSRN

January 12, 2024
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