January 2021

15Jan

Why BlackRock’s CEO Says the Retirement Crisis Is Getting Worse

Even as BlackRock’s earnings surged in 2020, with the world’s largest asset manager benefiting from increased saving and investment, the coming retirement crisis in the U.S. is getting worse, BlackRock CEO Larry Fink said. Read also Swiss APK designs new climate strategy for investments The three reasons are low interest rates, low savings rates, and more part-timers and self-employed people in the economy. Partly because of the low U.S. household savings rate, Fink said he believed the U.S. has required...

January 15, 2021
News, Slider, ,
Read more...
14Jan

Pension Reform Primer : Issues, Challenges, Options and Arguments in Pension Reform

By World Bank The World Bank Pension Reform Primer aims to provide a comprehensive toolkit for policy makers on designing and implementing pension reform. It is based on continuously updated information from countries that have introduced reforms emphasizing the role of privately-managed individual retirement accounts. Their experience offers a number of useful lessons for policy makers elsewhere. The Bank set out a conceptual framework for fundamental pension reform in "Averting the Old Age Crisis: Policies to Protect the Old...

January 14, 2021
Books, Pension design, System Sustainability,
Read more...

Investing in People : Social Protection for Indonesia’s 2045 Vision

By Holmemo, Camilla Acosta, Pablo, George, Tina Palacios, Robert J. Pinxten, Juul Sen, Shonali, Tiwari, Sailesh The Government of Indonesia's Vision for 2045 sets an ambitious path that will require significant investments in human capital and social protection Indonesia continues to set ambitious goals for its growth and development. The Government of Indonesia's (GoI) vision for 2045—when the country celebrates 100 years of independence—is to achieve high income status and reduce poverty to nearly zero. In addition to sustained...

January 14, 2021
Books, System Sustainability, ,
Read more...
14Jan

Maximizing Utility of Withdrawals in Retirement and the Efficiency of Required Minimum Distributions

By Chester Chambers We focus on a simplified problem for a risk-averse retiree seeking to maximize utility associated with annual spending and a remaining value at the end of the problem horizon when the funds are extracted from a portfolio that includes a risk-free and a risky asset. To organize discussions about this setting we utilize a novel metric which we label “Efficiency”. This measurement compares the utility derived from annual withdrawals and the final value with a benchmark...

January 14, 2021
Articles, Pension Management, Savings, , ,
Read more...
14Jan

How Poor Bangladeshi Households Behave Regarding Access to Commitment Savings Products

By Carolina Laureti, Mélanie Volral Access to commitment savings products is known to increase poor households’ savings. In this paper we analyze the process through which households change their savings behavior, by exploiting a unique dataset released by SafeSave, a Bangladeshi microfinance institution that launched the Long Term Savings commitment product in 2009. First, we find that households increase their savings a few months before they open the commitment product. Then, distinguishing early takers (who take up the commitment...

January 14, 2021
Articles, Savings, ,
Read more...
14Jan

Another Brick on the Wall: On the Effects of Non-Contributory Pensions on Material and Subjective Well Being

By Rosangela Bando, Sebastian Galiani, Paul J. Gertler Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the Pensiones Alimentarias program established by law in Paraguay, which targets older adults living in poverty. Households with a beneficiary increased their level of consumption by 44 percent. The program...

January 14, 2021
Articles, Pension design, System Sustainability
Read more...
14Jan

U.K. government cuts administration fees for smallest DC pots

U.K. defined contribution plans with £100 ($136) in assets or less will be exempt from paying administration fees, the government said Wednesday. A consultation into fee cap rules aimed at protecting automatically enrolled plan participants from paying high fees resulted in the government keeping the fee cap at its current level set at 0.75% of assets under management and administration. The consultation was launched in June. However, due to additional concerns raised by respondents to the consultation around the...

January 14, 2021
News, Slider, ,
Read more...
14Jan

Nigeria. Pension funds take up investing in Bitcoin

Pension funds have already begun investing in the world’s most popular crypto asset, Bitcoin, according to the biggest crypto hedge fund firm, popularly known as Grayscale. In a recent Bloomberg interview, Grayscale CEO, Sonnenshein, disclosed on the pension industry joining hedge funds and other institutional firms in gaining exposure to Bitcoin through his firm portfolio, better known as Grayscale Bitcoin Trust. We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from,...

January 14, 2021
News, Slider, ,
Read more...
14Jan

How climate change is ruining retirement across the US

Jay Gamel, 76, still talks about his Northern California home in the present tense, as if nothing had happened. “The place is a paradise by any measure,” says Gamel, who is semiretired. “The mountains are beautiful, the surroundings are gorgeous. It’s a postcard.” For 26 years, Gamel had lived in — no, reveled in — his little redwood cabin in the Sonoma County town of Kenwood, where he edits a twice-monthly local newspaper. Gamel, who moved there from Chicago,...

January 14, 2021
News, Slider, ,
Read more...
14Jan

UK. Retirees at risk of draining pension pots dry

Three-quarters of pensioners could run out of cash with a decade of retirement left. Older savers risk running out of money and being forced to rely on just the state pension during the last 10 years of their life, according to a study. Nearly six years on from the introduction of pension freedoms rules that gave savers more independence over how they take their retirement pots, research by pension provider The People’s Pension suggests some people are spending their...

January 14, 2021
News, Slider, ,
Read more...