February 2017

04Feb

Footnotes Arent Enough: The Impact of Pension Accounting on Stock Values

By Julia Coronado, Olivia S. Mitchell, Steven A. Sharpe & S. Blake Nesbitt Some research has suggested that companies with defined benefit (DB) pensions are sometimes significantly misvalued by the market. This is because the measures of pension cost and pension net liabilities embedded in financial statements, taken at face value, can provide a very misleading picture of pension finances. The more pertinent information on pension finances is relegated to footnotes, but this might not receive much attention from portfolio...

February 4, 2017
Articles, Investing
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04Feb

Workers' Knowledge of their Pension Coverage: A Reevaluation

By Martha Starr-McCluer & Annika Sundén Because employer-provided pensions represent an important source of income during retirement, accurate information on pension coverage would seem to be crucial for making sound decisions on retirement timing, saving and portfolio allocation. However, previous research suggests that workers’ knowledge of their pension provisions is often incomplete or incorrect. This paper re-examines workers’ knowledge of their pension coverage, using matched employer-employee data from the Federal Reserve Board’s Survey of Consumer Finances. We find that, while...

February 4, 2017
Aging, Articles, Labor Market,
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04Feb

Workers’ Knowledge of their Pension Coverage: A Reevaluation

By Martha Starr-McCluer & Annika Sundén Because employer-provided pensions represent an important source of income during retirement, accurate information on pension coverage would seem to be crucial for making sound decisions on retirement timing, saving and portfolio allocation. However, previous research suggests that workers’ knowledge of their pension provisions is often incomplete or incorrect. This paper re-examines workers’ knowledge of their pension coverage, using matched employer-employee data from the Federal Reserve Board’s Survey of Consumer Finances. We find that, while...

February 4, 2017
Aging, Articles, Labor Market,
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04Feb

Cash Balance Pension Plan Conversions and the New Economy

By Julia Coronado & Phillip Copeland Many firms that sponsor traditional defined benefit pensions have converted their plans to cash balance plans in the last ten years. Cash balance plans combine features of defined benefit (DB) and defined contribution (DC) plans, and yet their introduction has proven considerably more controversial than has the increasing popularity of DC plans. The goal of this study is to estimate a hierarchy of the influences on the decision of a firm to convert its...

February 4, 2017
Articles, Investing, Pension design,
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04Feb

Did Pension Plan Accounting Contribute to a Stock Market Bubble?

By Julia Coronado & Steven Sharpe During the 1990s, the asset portfolios of defined benefit (DB) pension plans ballooned with the booming stock market. Due to current accounting guidelines, the robust growth in pension assets resulted in a stealthy but substantial boost to the profits of sponsoring corporations. This study assesses the extent to which equity investors were fooled by pension accounting. First, we test whether stock prices reflected the fair market value of sponsoring firms’ net pension assets reported...

February 4, 2017
Articles, Corporate Governance, Investing, Regulation
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04Feb

Changing Frameworks for Retirement Security

By Olivia S. Mitchell In 1963, the termination of the Studebaker Corporation’s pension plan wiped out or significantly reduced the pensions of thousands of the automaker’s employees and retirees. In response, Congress passed the 1974 Employee Retirement Income Security Act (ERISA), a monumental and revolutionary piece of legislation crafted to address corporate pension underfunding and set new rules regarding defined benefit (DB) and other retirement plans. ERISA also established the Pension Benefit Guaranty Corporation as a government-run insurer to serve...

February 4, 2017
Articles, Corporate Governance, Regulation, ,
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04Feb

Aging and Financial Victimization: How Should the Financial Service Industry Respond?

By Marguerite DeLiema and Martha Deevy Elder financial victimization is a growing problem facing older Americans. As the conduits of financial transactions, financial firms are positioned to stop losses at their source. Representatives at small and large firms were interviewed to describe their financial exploitation training and prevention programs, their detection and response protocols, and how they balance the goals of client protection with the client’s right to autonomy and privacy in financial decision-making. Representatives from regulatory agencies were interviewed...

February 4, 2017
Aging, Articles, Corporate Governance, ,
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04Feb

5th Ethiopia economic update : why so idle? – wages and employment in a crowded labor market : draft for public launch

By World Bank Strong economic growth continued in 2014-15, but the drought slowed down Ethiopia’s growth to 8 percent in 2015-16. Exports have had their worst performance in the last decade and the current account balance remained large. Inflation is remarkable stable given the recent drought and even declining; it stood at 5.6 percent in October 2016. Understanding the nature of urban labor markets is important for a successful transition to a manufacturing and service-oriented economy and to further reduce...

February 4, 2017
Articles, Labor Market, Regulation
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04Feb

Pension Coverage in Latin America: trends and determination

By Rafael Rofman & Maria Laura Oliveri This document presents an analysis of pension coverage trends in Latin America for the past decades. Its preparation involved the collection, revision, and processing of household surveys in over 18 countries in the region, spanning a period of almost 40 years in some cases. The main goal of this document is to offer comparable data on pension coverage among the economically active population and the elderly, considering the relevance of several demographic, social,...

February 4, 2017
Articles, Corporate Governance, Labor Market
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04Feb

International patterns of pension provision II: a worldwide overview of facts and figures

By Montserrat Pallares Miralles, Carolina Romero & Edward Whitehouse This paper presents and explains cross country data for mandatory publicly and privately managed pension systems around the world. This report is organized into three parts corresponding to three broad types of indicators. These indicators relate to: (i) the relevant contextual factors referred to here as environment; (ii) pension system design parameters; and (iii) indicators of performance. Part one of the report provides some information on the environment in which the...

February 4, 2017
Articles, Pension design, Regulation
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