January 2021

14Jan

Another Brick on the Wall: On the Effects of Non-Contributory Pensions on Material and Subjective Well Being

By Rosangela Bando, Sebastian Galiani, Paul J. 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 Pensiones Alimentarias program established by law in Paraguay, which targets older adults living in poverty. Households with a beneficiary increased their level of consumption by 44 percent. The program...

January 14, 2021
Articles, Pension design, System Sustainability
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08Jan

A Retirement Dashboard for the United States

By David John, Grace Enda, William G. Gale, J. Mark Iwry Navigating the retirement system is not easy for many workers, in the U.S. or abroad. Following several other countries, we advocate creating a retirement dashboard for the United States to help savers manage their retirement preparations. A dashboard would include an online registry letting each worker track their retirement accounts and benefits. It could also offer services such as recovering and consolidating lost accounts, projecting future income, or...

January 8, 2021
Articles, Innovation, Pension design,
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08Jan

The Demand for Simple and Flexible Retirement Products

By Pim Koopmans, Marike Knoef, Max van Lent Many people save too little for retirement. This paper studies – using a stated choice experiment – whether simplicity and flexibility can increase the demand for retirement products. We compare the willingness-to-pay (WTP) for self-employed workers and employees, and find that the self-employed are willing to give up 8% of post-retirement benefit in order to avoid having to provide information about their financial situation. In addition, self-employed workers are willing to...

January 8, 2021
Articles, Pension design, Savings, ,
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December 2020

23Dec

How an ERISA Fiduciary May Try to Save the World

By Albert Feuer On November 13, 2020, the U.S. Department of Labor (DOL) promulgated a final regulation regarding the investment duties of an ERISA fiduciary in selecting either direct plan investments or investment alternatives to make available to participants and beneficiaries of self-directed plans (the “Investment Duties Regulation”). The Regulation, like the proposed form of the Regulation, which provoked more than 8,000 public comments which were overwhelming critical, was intended to discourage what the DOL called ESG or sustainable...

December 23, 2020
Articles, Investment, Pension design, ,
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03Dec

DB or not DB, what is the solution?

By Mark Daniel  Mark Daniel takes us on a pensions journey, exploring various DB and DC plan designs and how these can help manage costs and possible risks. What a difference two years make. Boris Johnson is now the Prime Minister, Liverpool finally became Premier League Champions and, sadly (for me), Huddersfield Town are back down in football’s second tier. And then there is COVID-19. Who could have predicted any of the above? Admittedly, you didn’t need a...

December 3, 2020
Articles, Pension design, System Sustainability, , , ,
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03Dec

An Assessment of Affordability and Impact of a Social Old Age Pension in Rwanda

By Jean Bosco Mbarute In low-income countries and middle-income countries, the coverage of contributory pension scheme is low and even stagnant. At the same time, older people are less able to rely on family and community support as a result of growing urbanization and migration. Then low-income workers and the poor simply cannot save enough to prepare for their old age. As a remedy, many countries are considering or have already implemented various forms of retirement income transfers aiming...

December 3, 2020
Articles, Pension design, System Sustainability, , , , ,
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November 2020

27Nov

Continuous-time Optimal Pension Indexing in Pay-as-You-Go Systems

By Oriol Roch Ageing population and economic crisis have placed pay-as-you-go pension systems in need of mechanisms to ensure its financial stability. In this paper, we consider optimal indexing of pensions as an instrument to cope with the financial imbalances typically found in these systems. Using dynamic programming techniques in a stochastic continuous-time framework, we compute the optimal pension index and portfolio strategy that best target indexing and liquidity objectives determined by the government. A numerical example is provided...

November 27, 2020
Articles, Pension design, ,
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27Nov

Pension and Health Services Utilization: Evidence from Social Pension Expansion in China

By Shanquan Chen, Xi Chen, Stephen Law, Henry Lucas, Shenlan Tang, Qian Long, Lei Xue and Zheng Wang The proportion of people aged 60 years or over is growing faster than other age groups. The well-being older adults depend heavily on their state of health. This study evaluates the effects of pensions on older adults' health service utilization, and estimates the size of pension required to influence such utilization. Using a nationally representative survey, the China Health and Retirement...

November 27, 2020
Articles, Pension design, System Sustainability, , , ,
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17Nov

Building Better Retirement Systems in the Wake of the Global Pandemic

By Olivia S. Mitchell In the wake of the global pandemic known as COVID-19, retirees, along with those hoping to retire someday, have been shocked into a new awareness of the need for better risk management tools to handle longevity and aging. This paper offers an assessment of the status quo prior to the spread of the coronavirus, evaluates how retirement systems are faring in the wake of the shock. Next we examine insurance and financial market products that may...

November 17, 2020
Articles, Pension design, System Sustainability, , ,
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