February 2017

04Feb

Initiate Deficits to Strengthen Public Finances: The Role of Private Pensions

By Ales Berk, Dragan Jovanovic & Joze Sambt In this paper we use our comprehensive pension system model calibrated to the real demographic, employment and retirement data, measure transition costs of implementing mandatory private second-pillar into the pension landscape and consider fiscal sustainability of pension system. We report sensitivity to the most relevant parameters both within a second-pillar and a pay-as-you-go, and argue that fiscal sustainability and improved (higher) accrual rates are not incompatible policy goals if only pension reform...

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

Retirement Security: Better Information on Income Replacement Rates Needed to Help Workers Plan for Retirement

By Charles Jeszeck, Kimberley Granger, Jennifer Gregory, Melinda Bowman & Amrita Sen What GAO Found: Household spending patterns varied by age, with mid-career households (those aged 45-49) spending more than older households. For example, according to 2013 survey data from the Bureau of Labor Statistics (BLS), mid-career households spent an estimated average of around $58,500, while young retiree households (those aged 65-69) spent about 20 percent less. While the share of spending was consistent for some categories, other categories had...

February 4, 2017
Adequacy, Articles, Labor Market, ,
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04Feb

Adequacy (1) Pension entitlements, replacement rates and pension wealth

By Edward Whitehouse This note briefly sets out a methodology for calculating prospective pension entitlements promised in the future to today’s workers. This method can (and has been) applied to a wide range of countries with very different pension systems. The entitlements shown here are prospective. It looks at theoretical values and so illustrates the way the current parameters and rules of pension systems will work for different example individuals. This can be used to assess the adequacy of future...

February 4, 2017
Adequacy, Articles, Regulation,
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03Feb

Saving and taxation in a voluntary pension system : toward an agent-based model

By Balázs Király Mandatory pension systems only partially replace old-age income, therefore the government also operates a voluntary pension system, where savings are matched by government grants. Accounting for the resulting tax expenditure, our models describe the income flow from shortsighted to farsighted workers. 1. In rational models, explicit results are obtained, showing the limited learning of shortsighted workers. 2. In agent-based models, this learning is improved and this raises the shortsighted workers' saving and reduces perverse income redistribution. (more…)

February 3, 2017
Savings, System Sustainability, , ,
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