February 2024
02Feb

Redistributive effects of pension reforms: who are the winners and losers?

By Miguel Sánchez-Romero, Philip Schuster & Alexia Prskawetz As the heterogeneity in life expectancy by socioeconomic status increases, many pension systems imply a wealth transfer from short- to long-lived individuals. Various pension reforms aim to reduce inequalities that are caused by ex-ante differences in life expectancy. However, these pension reforms may induce redistribution effects. We introduce a dynamic general equilibrium-overlapping generations model with heterogeneous individuals that differ in their education, labor supply, lifetime income, and life expectancy. Within this framework we...

February 2, 2024
Articles, System Sustainability, ,
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January 2024
16Jan

Data Shows That Saving for Retirement Isn’t a Popular New Year’s Resolution. Here’s Why.

Now on the one hand, it's easy to see why a goal like paying off debt might trump funding a 401(k) or IRA. If you're staring at a credit card balance with a 20% interest rate attached to it, you're going to want to do your best to knock out that debt as soon as possible. Similarly, if you have no money (or little money) set aside for emergency expenses, then it's easy to see why you'd first work...

January 16, 2024
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December 2023
15Dec

Subjective survival beliefs and social networks

By Seung Jeonga, Iqbal Owadallya, Steven Habermana & Douglas Wright People's perceptions about their chances of survival are known to deviate from the objective survival probabilites derived statistically from mortality data. This is crucial because it may explain why people save too little, why their retirement plans are inadequate, and why they do not buy financial security products such as life insurance and annuities which could protect them and their family in the event of early death or in old...

December 15, 2023
Aging, Articles, , , ,
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September 2023
29Sep

Motivated Saving: The Impact of Projections on Retirement Contributions

By George Smyrnis, Hazel Bateman, Loretti Dobrescu, Ben R. Newell & Susan Throp Projections of future benefits can assist pension plan participants prepare for retirement. Here we measure the effects of projections of retirement incomes and lump sum balances on voluntary contributions and plan interactions of retirement savers. Data from a two-year field trial in a large Australian pension plan show that the frequency and average amount of participants’ voluntary contributions and interactions with the plan rose significantly in the...

September 29, 2023
Articles, Savings, , ,
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08Sep

Policy Forum: Pensions, Retirement Incentives, and the Role of Inflation

By Tammy Schirle This article describes the role of wage and price inflation for the retirement plans and well-being of registered pension plan members. The federal Public Service Pension Plan is used as an example to illustrate how wage and price inflation can be accounted for in pension design. Alternative scenarios illustrate the importance of pension plan provisions for the standard of living afforded retirees as well as incentives to delay retirement and continue working at older ages. Source @SSRN

September 8, 2023
Articles, Pension design, , ,
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08Sep

Racial and Ethnic Differences in Longevity Perceptions and Implications for Financial Decision-Making

By Abigail Hurwitz, Olivia S. Mitchell & Orly Sade  Inaccurate perceptions regarding life expectancy can lead to suboptimal financial decisions with long-term consequences, including undersaving prior to retirement, and overspending during retirement. As prior research suggests that Covid-19 mortality has disproportionately harmed those with low incomes, African Americans, and Hispanics in the United States, we seek to determine whether subjective survival perceptions among these groups changed in a manner consistent with observed outcomes. We fielded two online experimental surveys of...

September 8, 2023
Articles, Savings, , , ,
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August 2023
29Aug

Examining the Effects of Changes to UK Auto-Enrollment

Eliminating the U.K. trigger for auto-enrollment into workplace pension contributions—which currently requires an individual earn more than 10,000 pounds per year—would have a significant positive effect on the retirement outcomes for 90% of individuals, new research shows. However, the change mulled over by lawmakers across the pond may also have a negative impact on a small but considerable segment of the population, according to modeling and research commissioned by the Pension and Lifetime Savings Association and carried out by...

August 29, 2023
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July 2023
21Jul

Pension Reform, Incentives to Retire and Retirement Behavior: Empirical Evidence from Swedish Microdata

By Lisa Laun & Mårten Palme This paper investigates to what extent the 1998 reform of Sweden’s public old-age pension system contributed to the increase in extensive margin labor supply among older workers seen in the country in recent decades. We use a large data set containing all males and females born in Sweden between 1927 and 1950 and observe their retirement behavior during 1991–2012. The data show that the reform changed the incentives to remain in the labor force...

July 21, 2023
Articles, Pension design, , ,
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June 2023
20Jun

5 Better Ways for States to Promote Retirement Savings

Nobody plans to be broke when they retire, but American culture promotes consumption over thrift, and saving for retirement is particularly difficult for low-income workers. With Social Security so deeply underfunded that skinnier benefits and heftier taxes seem likely in the coming decade, the reluctance of many workers to save for their retirement is a mounting challenge that many states are taking upon themselves by prodding private-sector employers to provide retirement savings plans. But as it’s said about leading a...

June 20, 2023
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April 2023
21Apr

Retirement Savings Behaviours and Covid-19: Evidence from Thailand

By Paul Gerrans, Sunatharee Lhaopadchan & Sirimon Treepongkaruna This paper utilises administrative data from members of the Thai Government Pension Fund to examine voluntary contributions and investment plan change. We find low overall incidence of both behaviours which increased only modestly during the onset of COVID-19. While the major finding is that members are in the minority if they engage in the behaviour regardless of gender, salary, balance, or experience in the fund, the relative probability varies systematically by member...

April 21, 2023
Articles, Savings, , , , , ,
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