August 2017

27Aug

Self-Awareness, Financial Advice and Retirement Savings Decisions

By Anders Anderson (Swedish House of Finance) & David T. Robinson (Fuqua School of Business,) Using a financial literacy survey of Swedish pension investors matched to actual retirement savings decisions, we break respondents into three groups: those who are financially literate, those who mistakenly believe they are financially literate, and those who know that they are not. Investors with mistaken beliefs are more likely to work with mass-market advisors who steer them into high-fee funds. They underperform as a result....

August 27, 2017
Articles, Investing, Labor Market, Savings
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20Aug

Ethical, Environmental, Social and Governance-Oriented Investments

By Julia M. Puaschunder (Harvard) In the aftermath of the 2008/9 World Great Recession, ethical investing blossomed as opportunity to imbue trust in the economy. The crisis aftermath offered invaluable opportunities to redefine social investment to strengthen a more sustained, inclusive and equitable society. The 2015 incepted Sustainable Development Goals spearheaded the idea of financing societal advancement. Ethical, Environmental, Social and Governance-oriented Investments are key to sustainable prosperity. In the wake of stakeholder activism and based on intrinsic socio-psychological motives,...

August 20, 2017
Articles, Investing, Management, Slider-Left, ,
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20Aug

Whale Watching on the Trading Floor: Organizational Misbehaviour, Collusive Rogue Trading, and Corporate Culture Deficits in the Investment Banking Industry

By Hagen Rafeld & Peter N. Posch (TU Dortmund University); Sebastian G Fritz-Morgenthal (Frankfurt School of Finance and Management) Recent history reveals a series of rogue traders, jeopardizing their employer’s assets and reputation. There have been a number of instances of unauthorized acting in concert between traders, their supervisors, and/or firm’s senior management, resulting in collusive rogue trading (CRT). In the likes of the Libor manipulation by jointly several traders from major investment banks, CRT cannot be seen only in relation...

August 20, 2017
Articles, Corporate Governance, Investing, Management,
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July 2017

30Jul

Pension Funds, Capital Markets, and the Power of Diversification

By Fiona Stewart & Inna Remizova (World Bank); Romain Despalins (OECD) The potential for pension funds to contribute to capital markets and thereby economic growth has been argued on a theoretical basis and demonstrated empirically. However, reforms fostering the development of funded pension systems have not had the economic impact hoped for in some countries. Pension fund portfolios in some cases have remained highly exposed to shorter-term assets, such as bank deposits and shorter-term government bonds. This, in turn, has led to relatively...

July 30, 2017
Articles, Investing, Pension design,
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30Jul

Optimal Longevity Risk Transfer and Investment Strategies

By Samuel H. Cox (University of Manitoba), Yijia Lin (University of Nebraska) & Sheen Liu (Washington State University) Given the rising cost of maintaining defined benefit (DB) pensions, there has been a surge of activities in recent years by DB plan sponsors to transfer their pension risk through strategies such as buy-ins and buy-outs. As buy-in and buy-out transaction pipelines grow, insurers actively participating in the buy-in and buy-out markets are exposed to significant longevity risk embedded in pension schemes....

July 30, 2017
Articles, Investing, Management, Pension design, ,
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30Jul

Pension Funds and the Impact of Switching Regulation on Long-Term Investment

By Alvaro Pedraza & Fiona Stewart (World Bank); Olga Fuentes & Pamela Searle (Superintendencia de Pensiones) This paper looks at the impact of members' ability to switch pension fund provider and/or portfolio on the allocation of pension funds to long-term investments. The level of annual turnover in pension fund portfolios was compared with the amount of short-term investments (using government treasury bills and bank deposits as proxy). The investment regulations around switching and other market conduct were then considered. The...

July 30, 2017
Articles, Investing, Regulation,
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23Jul

Retirement Security in an Aging Society

By James M. Poterba The share of the U.S. population over the age of 65 was 8.1 percent in 1950, 12.4 percent in 2000, and is projected to reach 20.9 percent by 2050. The percent over 85 is projected to more than double from current levels, reaching 4.2 percent by mid-century. The aging of the U.S. population makes issues of retirement security increasingly important. Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of...

July 23, 2017
Aging, Articles, Investing, Savings, , ,
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02Jul

Income and Subjective Well-Being: Evidence from Singapore’s First National Non-Contributory Pension

By Yanying Chen & Yi Jin Tan (Singapore Management University) Using a new monthly longitudinal survey of elderly Singaporeans, we precisely time and study the announcement and disbursement effects of an exogeneous permanent income shock on a broad range of subjective well-being domains. The source of this permanent income shock is a new means-tested non-contributory pension, the Silver Support Scheme (SSS). Using a difference-in-differences strategy, we find that pension recipients experienced improved life satisfaction upon announcement of the SSS; this...

July 2, 2017
Articles, Investing, Labor Market, Savings,
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02Jul

Income and Subjective Well-Being: Evidence from Singapore's First National Non-Contributory Pension

By Yanying Chen & Yi Jin Tan (Singapore Management University) Using a new monthly longitudinal survey of elderly Singaporeans, we precisely time and study the announcement and disbursement effects of an exogeneous permanent income shock on a broad range of subjective well-being domains. The source of this permanent income shock is a new means-tested non-contributory pension, the Silver Support Scheme (SSS). Using a difference-in-differences strategy, we find that pension recipients experienced improved life satisfaction upon announcement of the SSS; this...

July 2, 2017
Articles, Investing, Labor Market, Savings,
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June 2017
18Jun

In-Kind Infrastructure Investments by Public Pensions: The Queensland Motorways Case Study

By Michael Bennon, Ashby H. B. Monk & YJ Cho (Stanford University) OECD countries require billions in infrastructure investment for new projects and the rehabilitation of old assets. Public pensions are likewise underfunded and in need of stable, inflation-linked investment opportunities uncorrelated with the rest of their portfolio, making infrastructure a seemingly strong fit. This has led to calls to facilitate more direct investment by public pension funds in infrastructure. In truth there are many impediments to such programs. Under...

June 18, 2017
Articles, Corporate Governance, Investing, Savings,
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