March 2017
17Mar

Understanding the Determinants of Financial Outcomes and Choices: The Role of Noncognitive Abilities

By Gianpaolo Parise (Bank for International Settlements) & Kim Peijnenburg (Netspar) We explore how financial distress and choices are affected by non cognitive abilities. Our measures stem from research in psychology and economics. In a representative panel of households, we find people in the bottom decile of non cognitive abilities are five times more likely to experience financial distress compared to those in the top decile. (more…)

March 17, 2017
Articles, Investing, Labor Market, Savings, ,
Read more...
17Mar

US. Retirement industry to undergo major changes with or without DOL fiduciary rule

The business of saving for America's retirement is changing. The retirement industry is facing a $7.7 trillion gap, and the Department of Labor's new fiduciary rule, which states that advisers must give clients the best advice at a reasonable price, is at risk. The rule was originally supposed to take effect on April 10, but President Donald J. Trump in February ordered its review, resulting in the DOL's recent proposal to delay the rule's implementation for 60 days. Regardless of...

March 17, 2017
News
Read more...
17Mar

Life-Cycle Consumption, Investment, and Voluntary Retirement with Cointegration between the Stock and Labor Markets

By Min Dai, Shan Huang & Seyoung Park (National University of Singapore) We present an optimal life-cycle consumption, investment, and voluntary retirement model for a borrowing and short sale constrained investor who faces cointegration between the stock and labor markets. With reasonable parameter values, there exists a target wealth-to-income ratio under which the investor does not participate in the stock market at all, whereas above which the investor increases the proportion of financial wealth invested in the stock market as...

March 17, 2017
Articles, Investing, Labor Market, Pension design, ,
Read more...
17Mar

UK. It may be a case of prepare a proper pension or prepare for poverty

Pensions are undergoing some radical changes. Many more workers are accessing pension schemes through auto-enrolment, even if the adequacy of many of these schemes is poor. Good quality Defined Benefit (DB) – where you know what you put in and what you’ll get out – schemes are being replaced by often poor quality Defined Contribution (DC) – where you only know what you’ll put in, not what you’ll get out. DC schemes shift the investment risk from employers to...

March 17, 2017
News
Read more...
17Mar

Risks in Advanced Age

By Michael A. Guillemette (Texas Tech University) • This article outlines risks retirees face and possible solutions to help them overcome behavioral hurdles. • A preference for certainty has been observed in advanced age and older defined contribution investors exhibit equity-varying risk aversion. • Clients face declining cognitive ability over time, which corresponds with a decrease in investment performance. • Financial literacy skills decline in advanced age but confidence does not, which may lead to older clients being overconfident in their financial...

March 17, 2017
Aging
Read more...
17Mar

Amicus Brief of National Employment Lawyers Association in Advocate Health Care Network v. Stapleton

By Matthew C. Koski, Brian Wolfman (Georgetown University) & Wyatt Gregory Sassman (Charleston School of Law) The Employee Retirement Income Security Act of 1974 (ERISA) governs the conduct of employers that offer pensions and certain other benefits to their employees. In enacting the law, “Congress’s primary concern was with the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.” Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 946 (2016)...

March 17, 2017
Articles, Labor Market, Pension design, ,
Read more...
17Mar

Labor Force Participation in New England vs. The United States, 2007–2015: Why Was the Regional Decline More Moderate?

By Mary A. Burke (Federal Reserve Bank of Boston) This paper identifies the main forces that contributed to the decline in labor force participation in New England between 2007 and 2015, as well as the forces that moderated the region’s decline relative to that of the nation. This exercise contributes to an assessment of the outlook for participation in New England moving forward. Similar to previous findings pertaining to the United States as a whole, the single largest factor in...

March 17, 2017
Articles, Labor Market,
Read more...
16Mar

UK. BMW workers hold protests over pension scheme closure plans

Members of Unite held demonstrations at the Mini plant in Cowley, Oxfordshire, and the Hams Hall engine plant in the West Midlands. The union said closure of the BMW occupational pension scheme could see some workers lose up to £160,000 in retirement income. A ballot for industrial action is being held, with the result due at the end of the month. A BMW statement said: " BMW Group has always prided itself in providing excellent pensions for all its staff and wants...

March 16, 2017
News
Read more...
16Mar

Costa Rica. Ticos se mantienen alejados del ahorro voluntario para el retiro

La obtención de un mayor ingreso para cuando llegue el momento de jubilarse es el objetivo principal del Régimen Voluntario de Pensiones (RVP), pero este sistema complementario aún capta a una minoría de los trabajadores afiliados al sistema de pensiones. Cada trabajador asalariado está obligado a aportar a una pensión obligatoria complementaria, que es registrada por la Caja y es administrada por la operadora de pensiones que elija el contribuyente. El grueso de aportantes a esa pensión, que pertenece al Régimen...

March 16, 2017
Noticias
Read more...
16Mar

Mexicanas multiplican 15 veces aportaciones voluntarias para el retiro, pero ya casi en la vejez

A las mexicanas les llega la preocupación por su retiro hasta después de los 60. Eso dicen las cifras. Si se trata de ver quién multiplica más su ahorro voluntario para el retiro desde que inicia su vida laboral hasta que concluye las ganadoras son las mujeres, revela el más reciente Reporte Nacional de Inclusión Financiera de 2016. Una mexicana multiplica 15 veces el monto de su ahorro voluntario a lo largo de su vida laboral, cuando inicia aporta un promedio de...

March 16, 2017
Noticias
Read more...