December 2024
23Dec

Here’s What Retirement on a Pension Looks Like in America

The pursuit of happiness in retirement is a lot easier with a pension. Retirees with regular paychecks report higher levels of satisfaction than those who rely on 401(k)s to supplement their Social Security, studies have shown. The security of a lifelong income is a source of comfort and happiness, those with pensions say. While 401(k)s can generate more wealth, retirees say navigating all the investing, tax and withdrawal strategies can add to their stress when they are trying to lower it. Pensions do have drawbacks....

December 23, 2024
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17Dec

Should the U.S. Government Create a Nationwide Retirement Savings Plan?

Proposed legislation suggests that the U.S. government is interested in creating a federally sponsored retirement savings program. Under the Retirement Savings for Americans Act, private-sector employees without access to employer-sponsored savings options would automatically be enrolled in the program. Other proposals would also provide for matching contributions for lower- and middle-income employees. We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether the United States should create a nationwide retirement savings plan at...

December 17, 2024
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13Dec

Do Pensions Enhance Worker Effort and Selection? Evidence from Public Schools

By Michael Bates & Andrew C. Johnston Why do employers offer pensions? We empirically examine two theoretical rationales, namely that pensions improve worker effort and worker selection. We test these hypotheses using rich administrative measures on effort and output for teachers around the pension-eligibility notch. When workers cross the notch, their effective compensation falls by roughly 50 percent of salary, but we observe no reduction in worker effort or output. This implies that pension payments do not increase effort. As for selection, we find...

December 13, 2024
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13Dec

China Expands Private Pensions Nationwide Despite Challenges

China is expanding its private pension fund pilot program nationwide to address retirement payout strains. The limitations of the experiment are already on display. Disappointing fund performance and a lack of investor interest are just some of the difficulties that private pension funds have encountered after China rolled out the program in 36 cities since 2022. The program allows workers to contribute as much as 12,000 yuan ($1,650) to tax-sheltered accounts similar to Individual Retirement Accounts in the US. It was...

December 13, 2024
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12Dec

Just 19% of UK savers have factored getting a serious illness in to their retirement plan

Just a fifth of UK savers (19%) have fully considered getting a serious illness in their retirement plan, according to research by consultancy Barnett Waddingham. Its At retirement reckoning report, which surveyed more than 5,000 UK employees, also found that 25% of respondents under the age of 50 have prepared for this possibility, compared to just 16% of those aged over 50. Two-fifths (43%) of this older age group have thought about it but not included it in their retirement planning, and 32%...

December 12, 2024
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06Dec

Latin America Lags in Establishing Sovereign Funds, Report Finds

A recent report from the International Forum of Sovereign Wealth Funds investigated why Latin America lags behind other emerging markets in developing sovereign wealth funds beyond stabilization funds. “It is striking that, in Latin America today, there are 12 sovereign wealth funds, nearly all of which are traditional stabilization funds,” the report stated. Unlike most sovereign wealth funds, stabilization funds can be drawn on by governments to reduce the impact of volatile revenue on the economy. Because the assets in the funds might...

December 6, 2024
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04Dec

Pension Markets in Focus 2024

By Organisation for Economic Co-operation and Development Pension Markets in Focus provides detailed and comparable statistics on asset-backed pensions around the world. This publication aims to help policy makers, regulators and other stakeholders evaluate the design and operation of pension systems, and to support policy discussions through international comparisons. Pension Markets in Focus is published annually. A preliminary version is published in June based on initial data on selected variables, and the final version in the last quarter of the year based on...

December 4, 2024
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November 2024
29Nov

Chinese Pension Insurance, Risk Attitudes, and Household Asset Allocation

By Hua Chen, Han Xiao, Yunxiao Guo & Ding Li Optimising household asset allocation is vital for expanding domestic demand in developing countries. This study uses 2017, 2019, and 2021 China Household Finance Survey (CHFS) data to explore pension insurance's effect on asset allocation among Chinese households. Key findings include that higher pension balances encourage investments in riskier assets. Specifically, for every 10% increase in pension account balances, the likelihood of investing in the risk asset market rises by 5%, and...

November 29, 2024
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22Nov

Do Pensions Enhance Worker Effort and Selection? Evidence from Public Schools

By Michael Bates & Andrew C. Johnston Why do employers offer pensions? We empirically examine two theoretical rationales, namely that pensions improve worker effort and worker selection. We test these hypotheses using rich administrative measures on effort and output for teachers around the pension-eligibility notch. When workers cross the notch, their effective compensation falls by roughly 50 percent of salary, but we observe no reduction in worker effort or output. This implies that pension payments do not increase effort. As for selection, we find...

November 22, 2024
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15Nov

Rethinking Pension Reform

By Giulia Giupponi & Arthur Seibold Population ageing is exerting unprecedented fiscal pressure on social security systems around the world. In response, many governments are implementing or planning pension reforms, often aimed at encouraging later retirement. A long-standing literature in public economics and labour economics investigates how the design of pension systems affects individual labour supply and retirement choices. In recent years, this literature has seen a revival, with a wave of new studies from Europe and the US combining high-quality...

November 15, 2024
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