February 2017

03Feb

Putting the Pension Back in 401(k) Plans: Optimal versus Default Longevity Income Annuities

By Vanya Horneff, Raimond Maurer & Olivia S. Mitchell Most defined contribution pension plans pay benefits as lump sums, yet the US Treasury has recently encouraged firms to protect retirees from outliving their assets by converting a portion of their plan balances into longevity income annuities (LIA). These are deferred annuities which initiate payouts not later than age 85 and continue for life, and they provide an effective way to hedge systematic (individual) longevity risk for a relatively low price. Using...

February 3, 2017
Aging, Articles, Labor Market, Pension design
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03Feb

Longevity Risk and Private Pensions

By Pablo Antolin This paper examines how uncertainty regarding future mortality and life expectancy outcomes, i.e. longevity risk, affects employer-provided defined benefit (DB) private pension plans liabilities. The paper argues that to assess uncertainty and associated risks adequately, a stochastic approach to model mortality and life expectancy is preferable because it permits to attach probabilities to different forecasts. In this regard, the paper provides the results of estimating the Lee-Carter model for several OECD countries. Furthermore, it conveys the uncertainty...

February 3, 2017
Aging, Articles, Investing, ,
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03Feb

Does the Chilean Pension Model Influence Life Satisfaction? A Multilevel Longitudinal Analysis

By Esteban Calvo This study assesses the influence of the Chilean old-age pension model on the life satisfaction of older adults across the world. Numerous countries have implemented similar old-age pension reforms, combining individualization of risk through pension privatization and redistribution of resources through mechanisms such as non-contributory pensions. Using data for 126,560 adults age 45 and over living in 91 countries over the period 1981-2008, and employing three-level hierarchical linear regressions, this study finds that on average redistribution increases...

February 3, 2017
Aging, Articles, Labor Market
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January 2017

12Jan

2016 SBST report

By Social and Behavioral Sciences Team - Last September, President Obama issued an Executive Order directing Federal agencies to integrate behavioral-science insights—research insights about how people make decisions and act on them—into the design of their policies and programs. The Executive Order also charged the Social and Behavioral Sciences Team (SBST), a cross-agency group of applied behavioral scientists, program officials, and policymakers, with providing policy guidance and advice to Federal agencies in support of this directive. The Social and Behavioral Sciences...

January 12, 2017
Aging, Pension design
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12Jan

Longevity Annuity: An Annuity for Everyone?

By Jason S. Scott - As of 2005, individuals had an estimated $7.4 trillion invested in IRAs and employer-sponsored retirement accounts. Given these investments, many retirees will face the difficult problem of turning a pool of assets into a stream of retirement income. Purchasing an immediate annuity is a common recommendation for retirees looking to maximize retirement spending. However, the vast majority of retirees are unwilling to annuitize all of their assets. This paper demonstrates that a new type of...

January 12, 2017
Aging, Articles
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