August 2021
12Aug

The Origins of ESG in Pensions: Strategies and Outcomes

By Stephanie Lachance, Judith C. Stroehle As intergenerational stewards of capital, pension funds can have many good reasons to embrace environmental, social, and governance (ESG) issues in their investment practices. Yet the particular structure of pension funds creates both advantages and disadvantages for the integration of ESG. This paper reviews the historical origins, regulatory mandates, and fund structures of pensions, to tease out exactly which of these characteristics enable and which of them impede the inclusion of ESG at pension...

August 12, 2021
Articles, Investment, System Sustainability, ,
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July 2021
16Jul

Private Retirement Systems and Sustainability: Insights from Australia, the UK, and the US

By Nathan Fabian, Mikael Homanen, Nikolaj Pedersen & Morgan Slebos Retirement system sustainability is defined as the ability of plan boards and managers to be responsible investors, active stewards, and allocators of capital to economic activities with desirable social and environmental outcomes. In this paper, we examine the policy frameworks and important structural variables pertinent to private retirement systems in Australia, the UK, and the US. By analyzing various reports, interviewing experts, and using data from the Principles of Responsible...

July 16, 2021
Articles, Investment, System Sustainability, , , ,
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02Jul

Pension Incentives and Labor Supply: Evidence from the Introduction of Universal Old-Age Assistance in the UK

By Matthias Giesecke, Philipp Jaeger We study the labor supply implications of the Old-Age Pension Act (OPA) of 1908, which, for the first time, provided pensions to older people in the UK. Using recently released census data covering the entire population, we exploit variation at the newly created age-based eligibility threshold. Our results show a considerable and abrupt decline in labor force participation of 6.0 percentage points (13%) when older workers reach the eligibility age of 70. To mitigate the...

July 2, 2021
Articles, Investment, Savings,
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02Jul

Public Pension Portfolios in a World of Low Rates and Low Risk Premiums

By He Ren, Sarah Siwinski, Calvin Yu, Andrew Ang Over the 2010s, the assets of public pension plans generated significantly higher returns than their assumed, or actuarial, rates of return. In a sample of 69 US public plans with a total of $2.1 trillion of assets, the return outperformance of assets over the assumed returns was over 200 basis points for the 10 years ending June 30, 2009. The outperformance is driven by their asset allocations being mostly exposed to...

July 2, 2021
Articles, Investment,
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June 2021
23Jun

Bright Africa 2020 Pension Industry. Modernising pension policies to future-proof long-term savings

By RISCURA The latest Bright Africa Pensions research highlights how African demographics are evolving and the impact of this on long-term savings. There is no doubt that Africa’s population is and will remain the world’s largest youthful cohort for a long-time to come, so serious thought, planning and innovation are urgently required to address the risk of individuals outliving their retirement savings. Research conducted by Albouy and Nogues (2019) shows that globally, life expectancy measured at age 65, has grown...

June 23, 2021
Books, Investment, Pension Management, Reports, , , ,
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17Jun

Financial Literacy, Naive Diversification, and Security Selection

By Thomas A. Hanson, Jenna Kalthoff Low levels of financial literacy have been linked to costly errors in investing behavior. This paper examines the relationship between financial literacy and the two financial tasks of asset allocation and security selection in an online survey of college students. Results suggest that financial literacy can slightly attenuate the naïve diversification bias and improve security selection decisions. The results support educational efforts to increase financial literacy to improve retirement savings and financial decisions. Source: SSRN 232...

June 17, 2021
Articles, Investment,
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11Jun

The Financial Times Guide to Wealth Management: How to plan, invest and protect your financial assets – The FT Guides

By Jason Butler The Financial Times Guide to Wealth Management is your comprehensive guide to achieving financial security and stability by planning, preserving and enhancing your wealth. As well as being fully updated throughout, it includes five new chapters on socially responsible and impact investing; property, land and woodlands; single premium investment bonds; non-trust structures and young people and money. Whether you're a beginner wanting an introduction to financial planning or an experienced investor looking to pass your wealth on...

June 11, 2021
Books, Investment, Pension design,
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May 2021
25May

Pension-Fund Investment in Forestry

By Clark S. Binkley, Fiona Stewart and Samantha Power A forestry investment can include land suitable for growing trees, the trees themselves, or both. The trees can be part of a natural forest or one that has been established artificially by seeding or planting. Natural forest management typically has lower operating costs than plantation forests, but also a lower growth rate. Plantation forests are typically, but not always monocultures. Forestry has long provided opportunities for institutional investors – but the scope...

May 25, 2021
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06May

Time Horizon, Saving Motive and Stock Market Participation

By Yosef Bonaparte This paper shows that household’s saving motives influence key portfolio choice decision: stock market participation. We utilize a unique data set from the Survey of Consumer Finance (2019 and panel 2007-209), which report about 24 reasons for saving and group these intro 6 saving motive categories: durable, retirement, bequest, emergency, smooth and luxury. Our channel to identify how saving motives influence portfolio choice encompasses the time horizon, from the household’s view, about the planning time horizon to...

May 6, 2021
Articles, Investment, Savings, ,
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April 2021
23Apr

Combining Flexible Asset Allocation, Sustainable Withdrawals, and Deferred Annuities to provide an Adaptive Lifelong Investing Solution

By Anran Chen, Steven Haberman, Steve Thomas In this paper, we integrate investment decisions in the post-retirement decumulation period with that of the deferred annuity purchase to provide a lifetime decumulation solution. Based on Monte Carlo simulation and historical experience, we use the Perfect Withdrawal Rate (PWR) as a tool to make recommendations on withdrawal rates and asset allocations for different levels of risk preferences. We have a few potentially important findings. First, we illustrate how cheap it is to...

April 23, 2021
Articles, Investment, Pension design, , ,
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