October 2019

18Oct

Designing for Behavior Change: Applying Psychology and Behavioral Economics

By Stephen Wendel A new wave of products is helping people change their behavior and daily routines, whether it's exercising more (Jawbone Up), taking control of their finances (HelloWallet), or organizing their email (Mailbox). This practical guide shows you how to design these types of products for users seeking to take action and achieve specific goals. Stephen Wendel, HelloWallet's head researcher, takes you step-by-step through the process of applying behavioral economics and psychology to the practical problems of product...

October 18, 2019
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18Oct

Effects of Taxes and Safety Net Pensions on Life-Cycle Labor Supply, Savings and Human Capital: The Case of Australia

By Michael P. Keane, Fedor Iskhakov In this paper we structurally estimate a life-cycle model of consumption/savings, labor supply and retirement, using data from the Australian HILDA panel. We use the model to evaluate effects of the Australian aged pension system and tax policy on labor supply, consumption and retirement decisions. Our model accounts for human capital accumulation via learning by doing, as well as wealth accumulation and decumulation over the life cycle, uninsurable wage risk, credit constraints, a...

October 18, 2019
Articles, Labor Market, Pension design, Savings, , ,
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18Oct

Motivated Saving: The Impact of Projections on Retirement Saving Intentions

By George Smyrnis, Hazel Bateman, Loretti Dobrescu, Ben Rhodri Newell, Susan Thorp The implications of current balance information for retirement provision are considerably difficult to grasp or anticipate. We study how balance and/or income projections motivate the voluntary savings intentions of pension plan participants over a sequence of ten choices. To this effect, we collect savings intentions from 1,615 respondents aged 25-57 years via an online experimental survey that compares four different formats for retirement account information. The formats...

October 18, 2019
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11Oct

The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value

By Peter Fader, Sarah E. Toms How did global gaming company Electronic Arts go from being named “Worst Company in America” to clearing a billion dollars in profit? They discovered a simple truth—and acted on it: Not all customers are the same, regardless of how they appear on the surface. In The Customer Centricity Playbook, Wharton School professor Peter Fader and Wharton Interactive’s executive director Sarah Toms help you see your customers as individuals rather than a monolith,...

October 11, 2019
Books, Pension design,
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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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04Oct

Retirement Policy and Annuity Market Equilibria: Evidence from Chile

By Gaston Illanes, Manisha Padi Retirement policy has indirect effects on its beneficiaries, through the “crowd-out” or “crowd-in” of insurance markets. We study how retirement policy in Chile, which limits the drawdown of retirement assets but otherwise does not provide or require fixed income in retirement, results in more than 60% of eligible retirees purchasing private annuities at low prices. We estimate a demand model to show that replacing this voluntary policy with partial mandatory annuitization and removing limits...

October 4, 2019
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04Oct

Computer As Confidant: Digital Investment Advice and the Fiduciary Standard

By Nicole G. Iannarone Digital investment advisers are the fastest growing segment of financial technology (fintech) and are disrupting traditional investment advisory delivery models. The computer-led investment advisory service model may be growing particularly quickly due to a confluence of social and political factors. Politicians and regulators have increasingly focused on the standards of care applicable to investment advice providers. Fewer Americans are ready for retirement and many lack access to affordable investment advice. At the same time, comfort...

October 4, 2019
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September 2019

27Sep

Pensions and Early Retirement: The Case of The Public Servants in Uganda

By Kibs Boaz Muhanguzi Retirement, if influenced by pensions, can be a good manifestation of how the government can use the pension system as a fiscal instrument to achieve some socioeconomic targets. Borrowing intuition from the postulations of disengagement theory of aging that when the elderly retire, they free up positions in paid work for the entry of young individuals, this study investigates the role of incentives on early retirement. The high levels of unemployment in Uganda amidst the...

September 27, 2019
Articles, Pension design, System Sustainability, , , ,
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27Sep

Does Automatic Enrollment Increase Contributions to Supplement Retirement Programs by K-12 and University Employees?

By Robert L. Clark, Denis Pelletier This study examines the impact of the adoption of automatic enrollment provisions by schools and universities in the state of South Dakota for its supplemental retirement saving plan (SRP). In South Dakota, educational personnel are also covered by a defined benefit pension plan and by Social Security. Thus, career public employees in South Dakota can expect a life time annuity from these two programs of around 75 percent of their final salary. Prior...

September 27, 2019
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