January 2020

10Jan

Sustainable Investing in Equilibrium

By: Lubos Pastor, Robert F. Stambaugh, Lucian A. Taylor We present a model of investing based on environmental, social, and governance (ESG) criteria. In equilibrium, green assets have negative alphas, whereas brown assets have positive alphas. The ESG investment industry is at its largest, and the alphas of ESG-motivated investors are at their lowest, when there is large dispersion in investors' ESG preferences. When this dispersion shrinks, so does the ESG industry, even if all investors' ESG preferences are strong....

January 10, 2020
Articles, Investment, Sustainability, ,
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03Jan

Pension Actuarial Mathematics

By Philip Martin McCaulay This 40-page publication on pension actuarial mathematics covers topics such as (I) interest and mortality, (II) cost methods, (III) amortization and contributions, and (IV) Duration and Convexity. Part I on interest and mortality includes mortality rates and survival functions, the theory of interest, commutation functions, and life annuity factors. Part II on cost methods includes the Unit Credit (UC) Cost Method, the Projected Unit Credit (PUC) Cost Method, the Entry Age Normal (EAN) Cost Method,...

January 3, 2020
Books, Investment, Pension design, Savings,
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November 2019

29Nov

The Future of Pension Plans in the EU Internal Market: Coping with Trade-Offs Between Social Rights and Capital Markets

By Nazaré da Costa Cabral, Nuno Cunha Rodrigues This edited volume takes a closer look at various European pension-plan models and the recent challenges, trends and predictions related to the design of such schemes. The contributors analyse new ideas, both from national governments and European institutions, and consider current debates on topics such as the Capital Markets Union (CMU) and the so-called ‘European Pillar of Social Rights’ – calling for a new approach to social policy at the European level...

November 29, 2019
Books, Investment, Pension design, , ,
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04Nov

Stewardship in the UK – The 2019 Draft Stewardship Code in Context

By Eva Micheler (London School of Economics - Law Department) The article interrogates the idea of creating a market for stewardship and identifies obstacles that stand in the way of such a market. In particular tax relief for pension investments deprives pension investors from an incentive to monitor investment and demand stewardship activity by their service providers. By granting tax relief the government has become a financial contributor to and a stakeholder in the financial services industry that services pensions....

November 4, 2019
Articles, Investment, Regulation, Supervision, , ,
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October 2019

25Oct

Measuring Household Wealth in the Panel Study of Income Dynamics: The Role of Retirement Assets

By Daniel Cooper, Karen E. Dynan, Hannah Rhodenhiser While the Panel Study of Income Dynamics (PSID) has much to offer researchers studying household behavior, one limitation is that its summary measure of wealth is not as broad as those of other commonly used surveys, such as the Survey of Consumer Finances (SCF), because it does not include the value of defined-contribution (DC) pensions. This paper describes the pension data available in the PSID and shows how they can be...

October 25, 2019
Articles, Investment, Savings, ,
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22Oct

IOPS Supervisory Guidelines on the Integration of ESG Factors in the Investment and Risk Management of Pension Funds

Published today, IOPS Supervisory guidelines on the integration of ESG factors in the investment and risk management of pension funds highlight a range of challenges to be met by pension funds governing bodies, asset managers and pension supervisors. Environmental, Social and Governance (ESG) factors are key and timely issues for the investment and risk management of pension funds, whose consideration is relatively new in the landscape of regulatory frameworks of pension funds worldwide. They are also dynamically evolving and...

October 22, 2019
Books, Investment, Pension Management, Regulation, , , ,
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18Oct

2019 Salary & Retirement Report-Finance & Banking Positions

By Craig Barnes The 2019 Salary & Retirement Report-Finance & Banking Positions is published annually with the most accurate salary data for over 20 positions in Executive functions. The report features national median salaries for each position, percentiles (10%, 25%, 75%, 90%) and median salary by age. The retirement planning data in the report includes: -401k Matching Funds by Age and Matching Percent -401k Fast Track "Aggressive" Cumulative Funds -401k Fast Track "Moderate" Cumulative Funds -401k Fast Track "Protected"...

October 18, 2019
Books, Investment, Reports, ,
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11Oct

Defined Contribution Plans: Key Information on Target Date Funds as Default Investments Should Be Provided to Plan Sponsors and Participants: Report to Congressional Requesters.

By U S Government Accountability Office Enroll workers, in 2007 the Department of Labor (DOL) identified three qualified default investment alternatives. One of these optionstarget date funds (TDF)has emerged as by far the most popular default investment. TDFs are designed to provide an age-appropriate asset allocation for plan participants over time.Because of recent concerns about significant losses in and differences in the performance of some TDFs, GAO was asked address the following questions: (1) To what extent do the...

October 11, 2019
Books, Investment, ,
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11Oct

Defined Benefit Pension De-Risking and Corporate Investment Policy

By Brian Silverstein U.S. corporate sponsors of defined benefit pension plans in recent years have been de-risking by paying premiums to transfer their pension plan assets and liabilities to the balance sheets of third party insurers. The passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21) in 2012 provided the pension funding relief necessary to make de-risking a mainstream corporate activity. This study provides the first empirical analysis of plan and firm factors that cause...

October 11, 2019
Articles, Investment, Pension design,
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11Oct

Tactical Target Date Funds

By Francisco Gomes, Alexander Michaelides, Yuxin Zhang We propose target date funds modified to exploit stock return predictability driven by the variance risk premium. The portfolio rule of these tactical target date funds (TTDFs) is extremely simplified relative to the optimal one, making it easy to implement and communicate to investors. We show that saving for retirement in TTDFs generates economically large welfare gains, even after we introduce turnover restrictions and transaction costs, and after taking into account parameter...

October 11, 2019
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