July 2020

20Jul

Financial Corner: How Can You Help Lower Your Longevity Risk?

Insurance companies and pension funds view longevity risk as the risk they incur when their assumptions about life expectancies and mortality rates are incorrect, leading to higher payout levels. But for you, as an individual investor, longevity risk is less technical and more emotional: it’s the risk of outliving your money. To assess your own longevity risk, you’ll first want to make an educated guess about your life span, based on your health and family history. Plus, you’ve got...

July 20, 2020
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17Jul

Does the actuarial adjustment for pension delay affect retirement and claiming decisions?

By Devon Gorry, Kyung Min Lee, Sita Slavov We investigate the impact of more generous terms for delaying state pensions on claiming and labor supply in the United Kingdom using a 2005 policy change. First, we find that the more generous delay terms reduced the fraction of males receiving pensions at the earliest eligibility age and shortly after. While there are also post-policy changes in women’s claiming behavior, further investigation reveals that these changes do not coincide with the...

July 17, 2020
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17Jul

Supporting Seniors: How Low-Income Elderly Individuals Respond to a Retirement Support Program

By Sumit Agarwal, Wenlan Qian, Tianyue Ruan, Bernard Yin Yeung Insufficient savings for retirement expose individuals to financial vulnerability in the post-retirement years and prompt governments to consider support measures. We study a government cash subsidy program for the low-income elderly population in Singapore. Using comprehensive, high-frequency transaction data, we find that elderly individuals increase spending by 0.7 dollars per dollar of subsidy received. We also show that they increase food expenditure and the variety of retail purchases. The...

July 17, 2020
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17Jul

Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations

By Tobin Hanspal, Annika Weber, Johannes Wohlfart We survey a representative sample of US households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt, but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households’ expectations about their own wealth and...

July 17, 2020
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17Jul

Public sector pension discrimination could cost UK taxpayer £17bn

The government has revealed it faces a £17bn bill for tackling “unlawful” age discrimination in public sector pensions, with 3 million people set to benefit by an average of more than £5,600 each. While the announcement spells good news for many teachers, nurses, police officers, firefighters and civil servants, commentators said the huge bill could not have come at a worse time and would almost certainly have to be financed through cuts in spending or higher taxes. Taxpayers are...

July 17, 2020
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17Jul

World is Facing a Population Bust

In his last book, "Billions and Billions," published in 1997, Carl Sagan wrote: “There is a well-documented worldwide correlation between poverty and high birthrates … exponential population growth slows down or stops when grinding poverty disappears. This is called demographic transition.” More recently, John Ibbitson and Darrell Bricker wrote in their book, "Empty Planet": Read also Australia. Low income earners get further support The great defining event of the twenty-first century — one of the great defining events in human...

July 17, 2020
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16Jul

UK. Govt’s ‘landmark’ pensions bill proceeds to Commons

The Pension Schemes Bill, which includes rules for pension dashboards and new powers for the Pensions Regulator, has cleared its first hurdle in the House of Lords. Read also UK. Does benchmarking DB transfers against a workplace pension make sense? The bill, originally announced in the October Queen’s Speech, will now pass into the House of Commons where MPs will debate its measures before it receives Royal Assent and is written into law. Read also UK. Proposed Legislation for Losses...

July 16, 2020
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16Jul

FLF Africa launches Financial Literacy for Coronavirus Alleviation programme

The Financial Literacy Foundation Africa has launched a Financial Literacy for Coronavirus Alleviation programme (FLICA) which aims to provide education on how to handle economic and financial hardships arising from the Covid-19 pandemic. This continental project will take place in all 46 countries in sub-Saharan Africa and aims to achieve financial independence for eight out of every ten individuals by 2030. “The strategic approach will address attitudinal and behavioral barriers to our goal of financial wellness through public education...

July 16, 2020
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16Jul

US. DOL Proposes New Rules for Selecting Retirement Plan Investments

If you are a member of the committee for your employer’s pension, 401(k), profit-sharing, or 403(b) plan, you should check out a set of proposed rules for selecting investments. If you have an outside investment advisor, as you probably should, they should be bringing these proposals to your attention. This process of the DOL’s presents a good opportunity to look at your plan’s procedures to assure that you and your advisor are both meeting your fiduciary responsibilities. The Notice...

July 16, 2020
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16Jul

Sint Maarten. Government and APS hosting meeting on pension reform

The pension reform legislation has been approved by Parliament, effective July 1, a positive development that will introduce important changes to secure the sustainability of the pension system for the future. The most important changes in the pension reform will be addressed via Zoom video meetings hosted by the General Pension Fund of St. Maarten APS and the government of St. Maarten. There will be two options to attend the virtual meetings and ask questions: Thursday, July 16, 1:00-2:30pm; or...

July 16, 2020
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