February 2017

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

Investment Consultants and Institutional Corruption

By Jay Youngdahl Analyses of the financial crisis of 2007-2009 and the continuing effects of a difficult investing environment have largely focused on factors such as the roles of failed and complex financial products, inadequate credit rating agencies, and ineffective government regulators. Nearly unexamined, however, is a key group of actors in the financial landscape, investment consultants. Investment consultants stand as gatekeepers between large investors, such as private and public retirement funds, and those from “Wall Street” who design and...

February 3, 2017
Articles, Corporate Governance, Investing, Regulation,
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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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03Feb

Risky Choices: Simulating Public Pension Funding Stress with Realistic Shocks

By James Farrell, Daniel Shoag State and local government pension funds in the United States collectively manage a very large and diverse pool of assets to meet the even large sum of accrued liabilities. Recent research has emphasized that widely-used accounting practices, like matching discount rates to expected asset returns, understate the market value of these liabilities. Less work has explored the risks inherent in existing diverse set asset allocations, and the accounting practices used by most state and local...

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

The Effects of Non-Contributory Pensions on Material and Subjective Well Being

By Rosangela Bando, Sebastian Galiani & Paul Gertler Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the Pension 65 program in Peru, which uses a poverty eligibility threshold. We find that the program reduced the average score of beneficiaries on the Geriatric Depression Scale by nine percent...

February 3, 2017
Articles, Pension design
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03Feb

Social Protection Floors Volume 1: Universal Schemes

By Isabel Ortiz, Valérie Schmitt & Loveleen De This volume showcases universal old-age and disability pensions as well as universal maternity and child protection schemes in developing countries like Argentina, Bolivia, Cabo Verde, China, Colombia, Lesotho, Mongolia, Rwanda, South Africa, Thailand, Timor Leste and Trinidad and Tobago. The volumes in this Ilo series present best country experiences, useful for South-South learning, for practitioners, and to provide the basis for better informed policy-making. Full Content: SSRN

February 3, 2017
Articles, Labor Market, Regulation
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03Feb

Austerity, ageing and the financialisation of pensions policy in the UK

By Craig Berry This article offers a detailed analysis of the recent history of pensions policy in the United Kingdom, culminating in two apparent `revolutions' in policy now underway: the introduction of `automatic enrolment' into private pensions, and proposals for a new `single-tier' state pension. These reforms are considered exemplary of the `financialisation' of UK welfare provision -- typified in pensions policy by the notion that individuals must take personal responsibility for their own long-term financial security, and engage intimately...

February 3, 2017
Articles, Pension design, Regulation, System Sustainability,
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03Feb

Micro-pensions in India: Issues and challenges

By Savita Shankar & Mukul G. Asher This article aims to fill a gap in the social security literature on India by examining the role of micro-pensions. The analysis suggests that because of the heterogeneity of the target population, micro-pension products — with microfinance institutions (MFIs) as the main, but not only sponsors — should be voluntary and portable and permit experimentation in their design and in the delivery of services. Accordingly, decentralized micro-pension schemes that operate within an appropriate...

February 3, 2017
Adequacy, Articles, Corporate Governance, Pension design,
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03Feb

The commitment value of funding pensions

By Jean Denis Garon This paper studies how funding public pensions can improve policy outcomes when short-sighted governments cannot commit. We focus on sustainable plans, where optimal nonlinear pensions are not reneged on by sequential governments. Funding pensions is a commitment mechanism. It implies lower contributions than does the second best policy, which reduces temptation to over-redistribute later and to misuse revealed private information. Funding may be preferable even if the population growth rate is higher than the rate of...

February 3, 2017
Articles, Corporate Governance, Regulation, ,
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