October 2023

Asian Retirement Markets 2023: Building Security Against Uncertainty

By Shaun Ng As Asia’s retirement pension funds evaluate the funding status for the many approaching their golden years, alternative investments offer diversification and returns. Major pension funds in Asia have been diversifying further into alternatives, driven by the need to deliver solid returns and combat inflationary pressures as they face a looming underfunding crisis. However, nearly 41% of Asian pensions surveyed by Cerulli cite a “limited understanding” of alternatives, while one-third say they lack in-house expertise when investing in alternatives....

The Vanguard Retirement Outlook: A national perspective on retirement readiness

By Fu Tan, Fiona Greig, Andrew S. Clarke, Kevin Khang, Kate McKinnon & Victoria Zhang The global retirement landscape is changing. As populations age, government retirement benefits are under pressure. At the same time, the shift from defined benefit to defined contribution workplace retirement plans means that workers bear more responsibility for managing capital markets risk and turning accumulated savings into retirement income. And many workers have no access to a workplace plan. In the United States, the figure is about...

Understanding Trends in Hispanic and African American Retirement Preparedness in the US

By Edward Nathan Wolff  Retirement income security refers to households’ ability to provide an adequate income stream during the period of their retirement from the labor force. Expected retirement income is based on four components: standard wealth holdings, defined contribution pensions, defined benefit pensions, and social security benefits. Using the Survey of Consumer Finances, I find that Black and Hispanic households made remarkable progress in terms of retirement income, poverty reduction, and replacement rates over 1989-2007. This was followed by...

The Role of Disability Insurance on the Labour Market Trajectories of Europeans

By Agar Brugiavini & Petru Crudu  This work documents the role played by disability insurance, typically part of a wider public pension provision package, on the labour market trajectories and retirement decisions. We will first employ a machine learning approach to estimate a Transition Probability Model able to uncover the most likely labour market histories and then evaluate the effects of policy reforms, including reforms to the eligibility for disability insurance benefits. The main contribution is the introduction of disability...

Replacement Rates and the Retirement Crisis

By Andrew G. Biggs  In 2014, the annual Social Security Trustees Report removed measures of Social Security replacement rates, which represent Social Security retirement benefits as a percentage of pre-retirement earnings. The Trustees expressed concerns that the Social Security Administration’s (SSA) actuaries’ methodology produced results that differed meaningfully from other common approaches. In 2023, the Social Security Trustees returned replacement rates to the report, without changes to the SSA methodology or discussion of their decision. The SSA replacement rate methodology produces...

Perspectivas demográficas del envejecimiento poblacional en la Región de las Américas

Por Organización Panamericana de la Salud & Comisión Económica para América Latina y el Caribe de las Naciones Unidas Con el objetivo de perfilar el conocimiento actual disponible sobre la situación de la salud y el bienestar de las personas mayores en la Región de las Américas al comienzo de la Década del Envejecimiento Saludable 2021-2030, así como de informar sobre el envejecimiento poblacional, en este informe se brinda información actualizada sobre las perspectivas demográficas en la Región. Los datos...

Reflexiones sobre la problemática de las pensiones estatales en México: Principios contables y transparencia

Por Guillermo Zamarripa & Jorge Sánchez Tello  La OCDE publicó a finales de 2015 un documento en el que revisa la situación de los regímenes de pensiones en México. El enfoque del trabajo fue concentrarse en evaluar el régimen de pensiones de los trabajadores del sector privado. Se menciona que existe un problema en México ocasionado por la fragmentación de su sistema de pensiones. Una recomendación general es la armonización de las reglas de los programas de pensión específicos. Sugieren migrar a un...

Consumo óptimo en el retiro con diferentes leyes de mortalidad

Por Alfredo Omar Palafox-Roca  Este trabajo estudia las trayectorias óptimas de consumo de personas en edad de jubilación que no pretenden heredar. Metodología: Se propone un modelo donde el número de años por vivir de un individuo jubilado es una variable aleatoria. Resultados: Se obtienen soluciones cerradas cuando el individuo depende de una sola fuente de recursos y cuenta o no con una cobertura por longevidad. Recomendaciones: El análisis aquí expuesto puede ayudar al diseño de mejores planes para el...

El modelo normativo de curso de vida en México: evidencias desde la desigualdad de género para una cohorte de adultos mayores

Por Fiorella Mancini y Gerardo Damián La perspectiva de curso de vida reconoce, en términos generales, la importancia de analizar cuatro grandes fases en la vida de las personas (Settersten, 2003; Blossfeld et al., 2006): la transición a la vida adulta, la movilidad laboral en plena edad activa, el vínculo entre trabajo y familia y, finalmente, la última etapa activa, asociada a la jubilación o el retiro del mercado de trabajo. A pesar de este reconocimiento generalizado, la mayoría de...

September 2023

Motivated Saving: The Impact of Projections on Retirement Contributions

By George Smyrnis, Hazel Bateman, Loretti Dobrescu, Ben R. Newell & Susan Throp Projections of future benefits can assist pension plan participants prepare for retirement. Here we measure the effects of projections of retirement incomes and lump sum balances on voluntary contributions and plan interactions of retirement savers. Data from a two-year field trial in a large Australian pension plan show that the frequency and average amount of participants’ voluntary contributions and interactions with the plan rose significantly in the...