September 2020

10Sep

Spanish Government looking at incentives for delaying retirement

The Spanish Government is looking at providing incentives for those who carry on working after the age of 65 while taking steps to stop high earners from taking early retirement. Read also Greece.Pay as you go for auxiliary pensions In his appearance on Wednesday before the Toledo Pact parliamentary commission, Inclusion and Social Security minister Jose Luis Escriva said his department’s intention is to encourage people to delay their retirement. through a redesign of the extra payments for those who...

September 10, 2020
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July 2020

30Jul

How much to save? decision costs and retirement plan participation

By Jacob Goldin, Tatiana Homonoff, Richard W. Patterson, William L. Skimmyhorn Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate...

July 30, 2020
Articles, Pension design, Savings,
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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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June 2020
22Jun

UK. TPR urged to nudge savers back into pensions

Employees who have opted out of their workplace pension during the coronavirus crisis should be encouraged back into saving more quickly than usual, MPs have said. Read also UK. Key workers being targeted by pension transfer scammers – APJ The Work and Pensions committee urged the Pensions Regulator (TPR) to consider helping such workers re-enrol sooner than the current three-year timeframe under auto-enrolment rules. Read also India. Govt may restrict foreign investment in pension funds The committee believes this is important...

June 22, 2020
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May 2020
22May

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...

May 22, 2020
Articles, Investment, Pension Management, , , ,
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February 2020

25Feb

UK pensions: New plan to auto enrol teen workers

The Government will outline plans to allow employees to join workplace pension schemes from 18 instead of 22 this week, to build on the success of auto-enrolment. Work and Pensions Secretary Therese Coffey will applaud the scheme for boosting the number of people in retirement savings schemes and reversing years of falling participation rates.  She will add that in order to build on its success, the Government will lower the eligibility age for joining a workplace scheme.  The lower earnings...

February 25, 2020
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11Feb

Australia. Pension minimums ‘nudge’ retirees to spend less, not more

Australian retirees are interpreting minimum pension drawdown rates as proxy financial advice from the government and holding back on spending more of their savings, according to a recent study out of the University of New South Wales (UNSW). The October 2019 study, ‘Spending from regulated retirement drawdowns: the role of implied endorsement’, found that 30 per cent of retirees were influenced by the “implied endorsement nudge” of a mandated minimum pension drawdown rule. “While regulated drawdowns compel regular withdrawal...

February 11, 2020
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07Feb

Demography and Provisions for Retirement – the Pension Composition, a Behavioral Approach

By B.M.S. van Praag, J. Hop Pensions may be provided for in a modern society by a mix of several methods, namely by voluntary individual savings, mandatory fully-funded occupational pension systems, mandatory social security financed by pay-as-you-go, and old-fashioned hoarding in cash. Here, we call the specific mixture of the four systems the pension composition. We assume that individual workers decide on their own individual savings, that the fully-funded occupational system is decided upon by the age cohort of...

February 7, 2020
Articles, System Sustainability, , ,
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07Feb

How Do Children Affect the Need to Save for Retirement?

By Andrew G. Biggs Children consume a substantial portion of a household’s income while living at home, but are usually financially independent by the time the parents reach retirement age. Relatively little attention has been paid to how children affect parents’ need to save for retirement. In this paper I use expenditure data from the Panel Study of Income Dynamics to construct life cycle expenditure patterns from households with children and childless households, comparing the two to gain insights...

February 7, 2020
Articles, Savings, ,
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01Feb

Demography and Provisions for Retirement: The Pension Composition, a Behavioral Approach

By B.M.S. van Praag, J. Hop Pensions may be provided for in a modern society by a mix of several methods, namely by voluntary individual savings, mandatory fully-funded occupational pension systems, mandatory social security financed by pay-as-you-go, and old-fashioned hoarding in cash.Here, we call the specific mixture of the four systems the pension composition. We assume that individual workers decide on their own individual savings, that the fully-funded occupational system is decided upon by the age cohort of the...

February 1, 2020
Articles, Savings, , ,
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