August 2024

Social pensions in the Americas: Recent developments

Ensuring adequate social security coverage for an ageing population is an important priority for governments and the global membership of the International Social Security Association (ISSA). Social pensions, also known as zero pillar or non-contributory pensions, complement contributory social insurance systems by providing a guaranteed source of income for people not adequately protected by other forms of social security. In doing so, they expand overall social protection and can be a powerful tool for combating old-age poverty, promoting social...

Rethinking Social Insurance for Self-Employed and Gig Workers

When designing a product, understanding the customers’ needs and preferences is essential. A case in point of the importance of tailoring product designs to customers is the “sachet revolution” in India. In the 1970s and 80s, some brands that sold daily essential products such as shampoos sought to target a large customer base who, at the time, could not afford these products: lower-income households and the rural market. To cater to the needs of low-income and rural households, these...

Improving Pension Information: Experimental Evidence on Learning Using Online Resources

By Denise Laroze, Gabriela Fajardo, Charles Noussair, Ximena Quintanilla, Paulina Granados, Pedro Vallette, Mauricio López-Tapia Deciding what to do with one's pension funds is a high-stakes, one-shot decision. Retirement schemes are often described in technical jargon that few people understand. We consider whether the learning process can be eased by providing information in video format (vs. the standard textual format) and by changes to the user interface of the websites on which individuals learn about their pension options. The results...

A Two-Generation Model with Altruism for Reverse Mortgage Demand

By Yunxiao Wang, Katja Hanewald, Zilin (Scott) Shao, Hazel Bateman Reverse mortgage markets remain relatively small internationally, with one frequently cited reason being bequest motives. We study the role of reverse mortgages in intergenerational financial planning as a tool for families to bring forward bequests. We develop a new two-generation lifecycle model with parental altruism to compare the welfare gains of bequests and early bequests (inter vivos gifts) for homeowning parents and adult children seeking to purchase their first home....

Collective Defined Contribution (CDC) Schemes: Assessing Capacity for Alternative Investments

By Aili Chen, CFA As pension systems adapt to changing economics and demographics, there is growing interest in collective defined contribution (CDC) schemes as they offer a different approach to retirement savings compared to defined benefit (DB) schemes. Instead of providing a guaranteed pension payment, CDC schemes provide workers with a pot of money to use in retirement, alleviating corporate sponsors of the responsibility and cost associated with providing lifetime guaranteed benefit payments. The size of the pension pot can...

A Wealth of Well-Being: A Holistic Approach to Behavioral Finance

By Meir Statman In A Wealth of Well-Being: A Holistic Approach to Behavioral Finance, Professor Meir Statman, established thought leader in behavioral finance, explores how life well-being, the overarching aim of individuals in the third generation of behavioral finance, is underpinned by financial well-being, and how life well-being extends beyond financial well-being to family, friendship, religion, health, work, and education. Combining recent scientific findings by scholars in finance, economics, law, medicine, psychology, and sociology with real-life stories at the intersection of finances and...

July 2024

US. A Philly Small Business Network May Have an Answer to America’s Retirement Crisis

Americans are woefully underprepared for retirement. So it's no surprise that employer-sponsored retirement programs are a high priority for all workers. Fifty-five-year olds in the U.S. currently have median retirement savings of less than $50,000, and two-thirds fear they will outlive their savings, a Prudential report recently revealed. However, only around one-third of small employers offer retirement savings plans, according to Fidelity Investment's 2023 Small Business Retirement Index, which cited time and cost as the biggest barriers small-business owners face in offering retirement benefits. First, employers must pay...

Global Pension Assets Study. 2024

By Thinking Ahead Institute The study covers 22 pension markets in the world (P22). They have pension assets of USD 55,688 bn. The P22 markets are: Australia, Brazil, Canada, Chile, China, Finland, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, South Africa, South Korea, Spain, Switzerland, UK, US. 91% of P22 assets are in the seven P7 largest markets. A deeper analysis is performed for the P7, with assets of USD 50,842 bn. P7 markets are: Australia, Canada, Japan,...

June 2024

The list of money managers axing oil stocks just got longer

There’s a growing list of institutional investors in Europe who are stripping oil and gas stocks out of their portfolios, in a move they say reduces the risk of ending up with stranded assets and financial losses. The latest to do so is PFA, Denmark’s largest commercial pension fund with roughly USD 110bn of assets under management. The investor has just offloaded its USD 170m stake in Shell Plc based on an assessment that the company’s capital expenditure on renewables...

UK trustee boards show robust governance frameworks – survey

A recent survey conducted by WTW has shown that most UK pension schemes are not overwhelmed by the new requirements of the General Code, with only 1% of respondents expecting significant changes to comply with it. The WTW 2024 Trustee Governance Survey — of 132 trustees, pension managers, and other stakeholders in March and April 2024 – has shed light on the evolving landscape of pension scheme governance in response to the newly implemented General Code, which came into effect in March 2024. It...