July 2017

16Jul

Liquidity and Solvency in Pay-as-You-Go Defined Contribution Pension Schemes: A Continuous OLG Sustainability Framework

By Jennifer Alonso-García (University of New South Wales) & Pierre Devolder (Catholic University of Louvain) Notional Defined Contribution pension schemes are defined contribution plans which are pay-as-you-go financed. From a design viewpoint, the countries where NDCs have been implemented cannot guarantee sustainability due to the choice of notional return paid to the contributions and the indexation rate paid to pensions. We study how the scheme should be designed to achieve liquidity and solvency with a limited set of assumptions in...

July 16, 2017
Articles, Pension design, Regulation, Savings,
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16Jul

How Hard Should We Push the Poor to Save for Retirement?

By Andrew G. Biggs (American Enterprise Institute) More than half of U.S. states are working to establish programs what would automatically enrollment in Individual Retirement Accounts (IRAs) workers who are not offered a retirement plan by their employer. These programs are designed to address a perceived shortfall of retirement saving, particularly among low-wage workers who are less likely to be offered an employer-sponsored plan. But the designers of state-run auto-IRA plans fail to consider three questions: Do the poor need...

July 16, 2017
Articles, Labor Market, Management, Savings, ,
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16Jul

Policy Reflection: Letter of Credit Usage by Defined Benefit Pension Plans in Canada

By Norma L. Nielson & Peggy L. Hedges (University of Calgary) There is an argument to be made for letting corporations hold off on contributing to their employees’ defined benefit pension plans, as long as there is a guarantee the cash will come eventually. That is the reason that provincial governments began allowing creditworthy companies to instead provide a letter of credit, backed by a Canadian bank, guaranteeing the cash deposit, and secured by the company’s line of credit or...

July 16, 2017
Adequacy, Articles, Pension design, Savings, ,
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09Jul

Role of Social Security in Explaining the Rate of Saving Disparity: A Historical Study of New Zealand versus Singapore: 1960 – 1993

By Debasis Bandyopadhyay & Vera M. Chung (University of Auckland) This paper provides evidence to argue that the difference in the social security schemes of two countries may help explain the disparity in their saving rates. We examine the argument by limiting our focus to a comparison of New Zealand and Singapore for the period 1960 – 1993. We choose the period to avoid the potential impact of the major restructuring of the New Zealand Superannuation since 1994 toward a...

July 9, 2017
Articles, Labor Market, Regulation, 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

Chapter 19: Individual Biases in Retirement Planning and Wealth Management

By James E. Brewer & Charles H Self III Around the globe, the gradual move from defined benefit pensions to defined contribution pensions has increased the need for individual retirement planning. Examples of this include U.S. savings rates at historic lows, poor retirement prospects for citizens in developed countries, and the disparaging gap between investor returns and market returns. Research indicates that individuals working with a financial advisor generally receive better results than those who do not. Working with a...

June 18, 2017
Adequacy, Articles, Pension design, Savings, ,
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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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06Jun

Assessing the Demand for Micropensions Among India’s Poor

By Olivia S. Mitchell (University of Pennsylvania) & Anita Mukherjee (University of Wisconsin) Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover...

June 6, 2017
Articles, Pension design, Savings, ,
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06Jun

Assessing the Demand for Micropensions Among India's Poor

By Olivia S. Mitchell (University of Pennsylvania) & Anita Mukherjee (University of Wisconsin) Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover...

June 6, 2017
Articles, Pension design, Savings, ,
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