October 2024
25Oct

2024 Defined Contribution Pension and Savings Report

By Stuart Arnold & Claire Murray This year’s survey reveals the immediate focus and priorities that employers, plan sponsors and pension trustees have for their defined contribution (DC) retirement plans. In this edition, in response to the growing concern surrounding retirement adequacy, we look at the views and actions of employers concerning the outcomes that employees can expect from their retirement provision. What are the main priorities for employers in retirement provision, what steps are sponsors taking, and what opportunities should...

October 25, 2024
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23Oct

U.S. retirement preparedness is lacking: Morningstar

A new study from Morningstar focused on U.S. retirement readiness illustrates that while there has been some improvement over time, general retirement preparedness is lacking. Using data from the Federal Reserve’s Survey of Consumer Finances, Morningstar researchers analyzed data from 3,442 households before projecting 1,000 possible “life paths” for each of them. The company used savings rates, withdrawal patterns, job turnover and health care expenses to reach its conclusions. The authors previously published two separate papers on their findings earlier this year. The bottom line, they say, is...

October 23, 2024
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22Oct

BlackRock’s Fink says U.S. needs to discuss retirement system issues, national debt

The two biggest issues facing the U.S. that don’t get discussed enough are the nation’s retirement system and mounting federal government debt, according to BlackRock Chair and CEO Larry Fink. Millions of Americans don’t have retirement savings and are frightened that they won’t be able to save enough to retire with dignity, Fink said Oct. 21 at the Securities Industry and Financial Markets Association’s annual meeting in New York. "We as a country refuse to talk about, 'Do we have the adequate...

October 22, 2024
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22Oct

China state pension recoups losses, posts positive return in 2023

China’s national pension fund reversed its 2022 losses, achieving a 1% investment return in 2023 despite a domestic market downturn, thanks to a diversified portfolio. Though it ranked as the worst annual performer among state-owned investors globally, the National Social Security Fund (NSSF) maintained robust long-term investment performance, with a 10-year average annual return of 6.4%, standing out among Asian peers. In 2023, the national pension fund recorded an investment return of Rmb25 billion ($3.5 billion), or 0.96%, including a realised...

October 22, 2024
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11Oct

Patterns of Consumption and Savings around Retirement

By Arna Olafsson & Michaela Pagel This chapter analyzes how consumption, savings, and other positions on household balance sheets change around retirement. Four patterns stand out. First, many households have barely any savings and hold substantial amounts of consumer debt at the time of retirement. Second, consumption falls at retirement, possibly due to work-related expenses, bargain shopping, or because households face unexpected adverse shocks. Third, liquid savings increase at retirement. Fourth, wealth increases more over the course of retirement for...

October 11, 2024
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11Oct

India launches pension system for all ages, infancy to 70

NPS Vatsalya allows accounts to be opened for children. India’s recent launch of the National Pension System (NPS) Vatsalya aims to expand pension coverage to a broader demographic, allowing individuals from infancy to 70 years old to participate. With its flexibility and portability, NPS Vatsalya allows accounts opened for children to be seamlessly integrated into workplace pensions as they enter the workforce. The flexibility of the NPS remains a key feature, with subscribers having control over their contributions, pension fund choices, and...

October 11, 2024
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08Oct

US. 4 Trends Transforming How The Country Saves For Retirement

From building your nest egg to navigating financial hurdles, everyone’s journey to retirement is unique—but a clear road map is key to success. This is evident in research conducted by investment management company Vanguard in its comprehensive How America Saves 2024 report, which explores hundreds of retirement contribution plans, thousands of data points and the actions of millions of participants. For the past 23 years, Vanguard has been researching retirement trends and using data to help plan administrators optimize offerings. The result?...

October 8, 2024
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04Oct

Savings Goals Matter – Cognitive Constraints, Retirement Planning, and Downstream Economic Behaviors

By Zihan Ye, Thomas Post, Xiaopeng Zou & Shenglan Chen We study how cognitive constraints relate to each distinct step of the planning and execution process for retirement, that is, individuals’ propensity to plan, savings goals set, and economic outcomes (wealth accumulation and portfolio choice). We find that different cognitive constraints play distinct roles: Higher advanced financial literacy (and quantitative reasoning ability) predicts a greater propensity to plan, while higher basic financial literacy and verbal cognition predict setting higher savings...

October 4, 2024
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04Oct

Reverse Mortgages, Financial Inclusion, and Economic Development: Potential Benefit and Risks

By Peter Knaack, Margaret Miller & Fiona Stewart This paper examines the state of reverse mortgage markets in selected countries around the world and considers the potential benefits and risks of these products from a financial inclusion and economic benefit standpoint. Despite potentially increasing demand from aging societies—combined with limited pension income—a series of market failures constrain supply and demand. The paper discusses a series of market failures on the supply side, such as adverse selection, moral hazard, and the costly...

October 4, 2024
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04Oct

US. Who’s left out of retirement savings system?

The tax-advantaged retirement savings system in the United States is one of the most effective wealth-building programs in the world. Too many working Americans, however, are left out of it. Their access to employer-provided retirement plans is limited, and the incentives in the retirement system fail to encourage lower-income workers to save. Just how many Americans are poorly served by the retirement savings system today? It is a deceptively hard question to answer, in part because there are no comprehensive,...

October 4, 2024
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