February 2017

04Feb

Managing and Supervising Risks in Defined Contribution Pension Systems

By Fiona Stewart & John Ashcroft Defined contribution (DC) plans are playing a larger role in pension systems around the world. Pension supervisory authorities are consequently asking if their oversight approaches need to adapt to this development – given that the risks within DC systems are born by the plan members themselves? This paper highlights the key challenges for DC supervisors, outlining the different mechanisms which can be used to control risks within DC systems, and how the use of these...

February 4, 2017
Articles, Regulation, Supervision,
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04Feb

Consumer Confusion: The Choice of Afore in Mexico

By Roberto Calderón-Colín, Enrique E. Dominguez & Moises J. Schwartz This paper was prepared for the World Bank 4th Annual Contractual Savings Conference (Washington DC, April 2008) co-organized by Gregorio Impavido. The article shows that account transfers among pension administrators in Mexico barely respond to price or return considerations and in general has not improved the consumer's pension balance. Instead of strengthening competition through lower fees and higher returns for the consumer, AFORE switching has so far undermined the system...

February 4, 2017
Articles, Labor Market, Regulation, Supervision, , ,
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04Feb

Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds

By Tony Randle & Heinz P. Rudolph Defined contribution pension systems have faced criticism in the wake of the financial and economic crisis for not delivering adequate and sustainable pension incomes at retirement. Much of the problem has centered around the misalignment of pension fund management companies and the interests of pension fund members, with the focus on short-term volatility rather than delivering adequate pension income over the long term. Although pension fund supervisors in emerging economies have attempted to...

February 4, 2017
Articles, Regulation, Supervision,
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04Feb

Private Pension Funds in Hungary: Early Performance and Regulatory Issues

By Dimitri Vittas The early performance of Hungary's voluntary private pension funds suggests that concerns about Hungary's ability to implement successful pension reform may be exaggerated. Despite the limited scope resulting from the high payroll taxes for the compulsory, unfunded public pillar in Hungary's pension system, the early performance of the voluntary private pension funds has been encouraging and in many respects better than expected. Investment returns have been well above the rate of inflation and participation has expanded rapidly....

February 4, 2017
Articles, Regulation, Supervision,
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04Feb

European System of Financial Supervision

By Thomas Papadopoulos In September 2009, the European Commission (‘the Commission’) brought forward proposals to replace the EU’s existing supervisory architecture with a European System of Financial Supervision (‘ESFS’), consisting of three European Supervisory Authorities — the European Banking Authority (‘EBA’), the European Securities and Markets Authority (‘ESMA’), and the European Insurance and Occupational Pensions Authority (‘EIOPA’) (hereinafter collectively referred to as the ‘ESAs’) — as well as the European Systemic Risk Board (‘ESRB’), the Joint Committee of the European...

February 4, 2017
Articles, Regulation, Supervision,
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04Feb

Risk-Based Supervision of Pension Funds: A Review of International Experience and Preliminary Assessment of the First Outcomes

By Gregory Brunner, Richard Hinz & Roberto de Rezende Rocha This paper provides a review of the design and experience of risk-based pension fund supervision in several countries that have been leaders in the development of these methods. The utilization of risk-based methods originates primarily in the supervision of banks. In recent years it has increasingly been extended to other types of financial intermediaries including pension funds and insurers. The trend toward risk-based supervision of pensions is closely associated with...

February 4, 2017
Articles, Supervision,
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04Feb

Nudging: A Very Short Guide

By Cass R. Sunstein This brief essay offers a general introduction to the idea of nudging, along with a list of ten of the most important “nudges.” It also provides a short discussion of the question whether to create some kind of separate “behavioral insights unit,” capable of conducting its own research, or instead to rely on existing institutions. Full Content: SSRN

February 4, 2017
Articles, Regulation,
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04Feb

Should Regulation Be Countercyclical?

By Jonathan Masur & Eric Posner Politicians and commentators have from time to time proposed that regulations be suspended or delayed during recessions because of their adverse impact on employment. We evaluate this argument from within a macroeconomic framework. We argue that a case can be made for what we call countercyclical regulation if certain empirical premises are valid; explore the ways in which such regulation might best be designed; and evaluate the legal authority of agencies to issue countercyclical...

February 4, 2017
Articles, Regulation
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04Feb

Pension Reform in Britain

By Edward Whitehouse This paper examines the evolution of the pension system in Britain. In particular, it focuses on the shift from pay-as-you-go, state-run defined-benefit pensions to individual, private-sector, funded defined-contribution accounts. It looks at three issues in this reform: the financing of the transition from pay-as-you-go to funded provision; the fiscal impact of voluntary switching and adverse selection; and the question of the degree to which personal pension accounts were 'over-sold' to individuals for whom they were not suitable....

February 4, 2017
Adequacy, Articles, Regulation
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04Feb

Uber Retirement

By Paul Secunda The rise of the gig economy with its part-time, itinerant, independent workers, in conjunction with the employee-centric nature of occupational retirement benefits under ERISA, has led to gig employees largely lacking meaningful retirement benefits. Current proposals to provide portable benefits to gig workers as independent workers or independent contractors are unacceptable because such benefits would not be secured by the fiduciary consumer protections of ERISA. However, two developments with regard to the retirement security of the gig workers...

February 4, 2017
Articles, Labor Market, Pension design
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