September 2022
09Sep

Colombia. Mintrabajo y Asofondos se reúnen y definen compromisos de política social en Colombia

La reforma pensional y laboral serán analizadas por cada uno de estos sectores. En una reunión entre la ministra de Trabajo Gloria Inés Ramírez y el presidente de las Administradoras de Fondos de Pensiones, Asofondos, Santiago Montenegro, se definió un compromiso para dar pasos importantes en Colombia en lo relacionado con la política social del país. El encuentro se destacó por el optimismo que embarga a los colombianos en mejorar sus condiciones laborales y de vida, ante el eventual trámite de...

September 9, 2022
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09Sep

France’s biggest union warns Macron: Reforming pensions now would ‘set France on fire’

France’s biggest union has warned President Emmanuel Macron that reforming pensions at a time of high inflation and economic woes would “set France on fire.” In an interview with RTL radio on Thursday, Laurent Berger, the president of the French Democratic Confederation of Labour (CFDT), said the French people “are in a very tense moment, with a lot of anxiety.” “I tell the government and will also tell the president: To start pushing back the legal retirement age in a vertical...

September 9, 2022
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09Sep

Rise of DC poses risks and challenges for future pensioners

Increasing reliance on defined contribution savings means the needs of future pensioners will be markedly different from those of previous generations, placing greater emphasis on the need for support, according to a new report. The report from the Pensions Policy Institute, published on September 8, explained that increasing reliance on DC pots as opposed to older defined benefit schemes results in “more complex” retirement finances that future pensioners will have to manage, and that these will require more active engagement...

September 9, 2022
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09Sep

Dutch pension funds sell $92.3 billion in assets, partially related to interest-rate hedges

Dutch pension funds sold €88 billion ($92.3 billion) in assets in the first six months of the year, in part to meet payments required under derivatives contracts, De Nederlandsche Bank said. Pension funds using derivatives contracts to hedge against interest rate rises have faced increased collateral calls due to rising rates, since the price of bonds has fallen in tandem. DNB said in an update Thursday that pension funds contributed €82 billion to margin accounts in the first six months of...

September 9, 2022
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09Sep

South Africa. EPPF confirms repayment of R30m in Brian Molefe pension order

Molefe is applying for leave to appeal the high court judgment requiring him to return R10m to the fund, possibly delaying resolution of the matter: Lorato Aphiri – Legal Advisor, Eskom Pension and Provident Fund. FIFI PETERS: Let’s shift on to the latest happenings coming out of the Eskom Pension and Provide Fund. They’ve said that the former Eskom boss, Brian Molefe, is still not paying back the money that is owed to the pension and provident fund. This relates...

September 9, 2022
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09Sep

Designing Successful Target Date Strategies for Defined Contribution Plans

By Schaus, Gross The ultimate guidebook for navigating the new world of pensions and retirement plans In the wake of the explosive growth of defined contribution (DC) plans invested with target date strategies, and the understanding of how important these strategies can be in effectively meeting retirement income goals, plan sponsors are seeking more optimal target date approaches. This timely book provides you with in-depth answers from the nation's most qualified and experienced experts to pressing questions about DC plan design. Read...

September 9, 2022
Books, Books, Investing,
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09Sep

Informality and the Challenge of Pension Adequacy: Outlook and Reform Options for Peru

By Christoph Freudenberg, Frederik G Toscani Past reforms have put the Peruvian pension system on a largely fiscally sustainable path, but the system faces important challenges in providing adequate pension levels for a large share of the population. Using administrative microdata at the affiliate level, we project replacement rates in the defined benefit (DB) and defined contribution (DC) pillars over the next 30 years and simulate the impact of various reform scenarios on the average level and distribution of pensions....

September 9, 2022
Adequacy, Books, Books, Pension design, , ,
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09Sep

Are Retirement Planning Tools Substitutes or Complements to Financial Capability?

By Gopi Shah Goda, Matthew Levy, Colleen Flaherty Manchester, Aaron Sojourner, Joshua Tasoff, Jiusi Xiao We conducted a randomized controlled trial to understand how a web-based retirement saving calculator affects workers’ retirement-savings decisions. In both conditions, the calculator projected workers’ retirement income goal. In the treatment condition, it additionally projected retirement income based on defined-contribution savings, prominently displayed the gap between projected goal and actual retirement income, and allowed users to interactively explore how alternative, future contribution choices would affect...

September 9, 2022
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09Sep

The Impact of Health on Wealth: Empirical Evidence

By Umesh Ghimire This paper empirically evaluates the impact of health on wealth among adults between the ages of 50 and 100 in the United States. Using the frailty index to measure health status and carefully accounting for the dynamic relationship between frailty and wealth, I find that suffering one more health deficit leads, on average, to approximately 2.23 percent decline in the net worth of American households. The impact is concentrated among individuals over the age of 70, in...

September 9, 2022
Aging, Articles, Savings, , ,
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09Sep

Spending Elasticity and Optimal Portfolio Risk Levels

By David Blanchett, Jeremy Stempien Research on optimal retirement strategies overwhelmingly assumes that the retirement income goal is effectively inelastic (or fixed), which implies the retiree household has neither the desire nor the ability to cut back on spending for the entire duration of retirement (which is often assumed to last 30+ years). This is an incredibly unrealistic assumption that has significant implications on a myriad of retirement decisions. This piece focuses on how spending elasticity impacts optimal portfolio risk...

September 9, 2022
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