June 2020
26Jun

How People React to Pension Risk

By Nicolas Salamanca, Andries de Grip, Olaf Sleijpen We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people’s future pension benefits to their pension funds’ funding ratio — a measure of the fund’s financial health — making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and...

June 26, 2020
Adequacy, Articles, Savings, ,
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April 2020
03Apr

How People React to Pension Risk

By Nicolas Salamanca, Andries de Grip, Olaf Sleijpen We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people's future pension benefits to their pension funds' funding ratio—a measure of the fund's financial health—making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and pension-age non-retirees, and for wealthier...

April 3, 2020
Articles, Savings, ,
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February 2020

22Feb

Financial incentives and retirement savings

By OECD Launched in 2014, this project is reviewing the cost effectiveness of tax and other financial incentives. It is assessing more efficient ways of using public money to increase savings for retirement, retirement income and replacement rates. The project is taking into account the distributional impact of various measures and will examine alternative means of encouraging saving in complementary private pension plans other than current tax advantages. The project addresses three key questions that interest policy makers: What the different fiscal...

February 22, 2020
Books, Books, Pension design, Savings, System Sustainability,
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December 2019
27Dec

Realistic Expectations and Limitations to Consumer-Facing Robo-tic Advisors

By Dirk Cotton, Neville Francis We present a benchmark life-cycle simulation model (RFSM) that incorporates the financial, demographic, and mortality positions of retired households. By adjusting several features we nest a specific type of consumer-facing (generic) robo model that attempts to minimize the user's workload by imputing key inputs. We calibrate both models under robo policies using the Health and Retirement data for our benchmark model and robo-imputed data for the Generic-Robo model. Our findings indicate that retirees using...

December 27, 2019
Articles, Investing, Pension design, Savings, ,
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23Dec

Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry

By Howard C Kunreuther Insurance is an extraordinarily useful tool to manage risk. When it works as intended, it provides financial protection to individuals and a profitable business model for insurance firms and their investors. But it is broadly misunderstood by consumers, regulators, and insurance executives. This book looks at the behavior of individuals at risk, insurance industry decision makers, and policy makers at the local, state, and federal level involved in the selling, buying, and regulating of...

December 23, 2019
Books, Books, Pension Management, ,
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November 2019

25Nov

US. States embrace nudge theory to promote retirement savings

A new government program that takes money out of people’s paycheck is gaining interest in state legislatures across the country — in part because it is wildly popular with voters. Oregon, Illinois and California have launched initiatives to create retirement savings accounts for residents whose employers do not offer company-sponsored programs. In those states, tens of thousands of workers have saved more than $40 million for their own retirements. The programs automatically divert 5 percent...

November 25, 2019
News, Slider, ,
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08Nov

Robert C. Merton and the Science of Finance

By Zvi Bodie Starting with his 1970 doctoral dissertation and continuing to today, Robert C. Merton has revolutionized the theory and practice of finance. In 1997 Merton shared a Nobel Prize in Economics “for a new method to determine the value of derivatives.” His contributions to the science of finance, however, go far beyond that. In this essay I describe Merton’s main contributions. They include the following: 1. The introduction of continuous-time stochastic models (the Ito calculus) to the theory...

November 8, 2019
Articles, Investing, ,
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