February 2017

03Feb

Pension Coverage in Kenya: Legal and Policy Framework Required to Enhance Pension Coverage in Kenya

By Nyakundi B. D. Kenya's pension system is fragmented and covers only 15% of the labor force. The enactment of the Retirement Benefits Act in 1997 has not in any significant way impacted on the widening coverage of the pension system. The problem of low coverage is attributable to lack of an effective policy aimed at widening of coverage and the current legal framework which was designed to target participation of formal workers. This paper argues that wide ranging policy...

February 3, 2017
Articles, Labor Market, Regulation,
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03Feb

Simplifying Choices in Defined Contribution Retirement Plan Design

By Donald Keim & Olivia S. Mitchell In view of the growth and popularity of defined contribution pensions, along with the government’s growing attention to retirement plan costs and investment choices provided, it is important to understand how people select their retirement plan investments. This paper shows how employees in a large firm altered their fund allocations when the employer streamlined its pension fund menu and deleted nearly half of the offered funds. Using administrative data, we examine the changes...

February 3, 2017
Articles, Investing, Labor Market,
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03Feb

Funding Public Pension Plans

By Jonathan Barry Forman Most state and local government employees are covered by traditional final-average-pay pension plans. State and local government employers typically fund those pension plans through a combination of employer and employee contributions, with help from investment returns on already-accumulated assets. Unlike private sector pension plans, however, public pension plans are not subject to strict minimum funding standards like those in the Employee Retirement Income Security Act of 1974 (ERISA). Public pensions also face more flexible accounting standards...

February 3, 2017
Articles, Corporate Governance, ,
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03Feb

Poverty, Inequality, and Social Policy in Transition Economies

By Branko Milanovic What happens to poverty and income inequality during the early period of transition to a market economy? Poverty is on the rise, and income inequality widens. Better targeting of social assistance and pension reform are the necessary policy reforms. In examining what happens to poverty and income inequality during the early period of transition to a market economy, Milanovic covers the period up to 1993. His analysis includes almost all transition economies that were not affected by...

February 3, 2017
Articles, Labor Market,
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03Feb

Longevity Risk and Private Pensions

By Pablo Antolin This paper examines how uncertainty regarding future mortality and life expectancy outcomes, i.e. longevity risk, affects employer-provided defined benefit (DB) private pension plans liabilities. The paper argues that to assess uncertainty and associated risks adequately, a stochastic approach to model mortality and life expectancy is preferable because it permits to attach probabilities to different forecasts. In this regard, the paper provides the results of estimating the Lee-Carter model for several OECD countries. Furthermore, it conveys the uncertainty...

February 3, 2017
Aging, Articles, Investing, ,
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03Feb

Investment Consultants and Institutional Corruption

By Jay Youngdahl Analyses of the financial crisis of 2007-2009 and the continuing effects of a difficult investing environment have largely focused on factors such as the roles of failed and complex financial products, inadequate credit rating agencies, and ineffective government regulators. Nearly unexamined, however, is a key group of actors in the financial landscape, investment consultants. Investment consultants stand as gatekeepers between large investors, such as private and public retirement funds, and those from “Wall Street” who design and...

February 3, 2017
Articles, Corporate Governance, Investing, Regulation,
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03Feb

Does the Chilean Pension Model Influence Life Satisfaction? A Multilevel Longitudinal Analysis

By Esteban Calvo This study assesses the influence of the Chilean old-age pension model on the life satisfaction of older adults across the world. Numerous countries have implemented similar old-age pension reforms, combining individualization of risk through pension privatization and redistribution of resources through mechanisms such as non-contributory pensions. Using data for 126,560 adults age 45 and over living in 91 countries over the period 1981-2008, and employing three-level hierarchical linear regressions, this study finds that on average redistribution increases...

February 3, 2017
Aging, Articles, Labor Market
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03Feb

Risky Choices: Simulating Public Pension Funding Stress with Realistic Shocks

By James Farrell, Daniel Shoag State and local government pension funds in the United States collectively manage a very large and diverse pool of assets to meet the even large sum of accrued liabilities. Recent research has emphasized that widely-used accounting practices, like matching discount rates to expected asset returns, understate the market value of these liabilities. Less work has explored the risks inherent in existing diverse set asset allocations, and the accounting practices used by most state and local...

February 3, 2017
Articles, Investing, Savings, ,
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03Feb

The Effects of Non-Contributory Pensions on Material and Subjective Well Being

By Rosangela Bando, Sebastian Galiani & Paul 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 Pension 65 program in Peru, which uses a poverty eligibility threshold. We find that the program reduced the average score of beneficiaries on the Geriatric Depression Scale by nine percent...

February 3, 2017
Articles, Pension design
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03Feb

Social Protection Floors Volume 1: Universal Schemes

By Isabel Ortiz, Valérie Schmitt & Loveleen De This volume showcases universal old-age and disability pensions as well as universal maternity and child protection schemes in developing countries like Argentina, Bolivia, Cabo Verde, China, Colombia, Lesotho, Mongolia, Rwanda, South Africa, Thailand, Timor Leste and Trinidad and Tobago. The volumes in this Ilo series present best country experiences, useful for South-South learning, for practitioners, and to provide the basis for better informed policy-making. Full Content: SSRN

February 3, 2017
Articles, Labor Market, Regulation
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