September 2021
10Sep

Horizon Effect on Optimal Retirement Decision

By Junkee Jeon, Minsuk Kwak & Kyunghyun Park We study an optimal consumption, investment, life insurance, and retirement decision of an economic agent who has an option to retire early any time before the mandatory retirement date. We conduct a thorough theoretical analysis for the optimal retirement problem with general utility function in the presence of mandatory retirement date, which leads to the optimal stopping problem in finite horizon. Furthermore, different marginal utility of consumption before and after retirement is...

September 10, 2021
Articles, Payout, Pension design, Retirement Age,
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03Sep

Policy Forum: Tax, Social Security, and Employment Status – Removing the Distortions in the United Kingdom

By Judith Freedman The COVID-19 pandemic has strained tax and social security systems. Cracks that have existed for some time have been opened up further and are unlikely to close without structural repair. New insights into the shifting nature of work, combined with the development of technologies that can provide modern, practical solutions to old problems, offer the opportunity to rethink the way we tax gig workers and other non-standard providers of labour. This article argues that we need to...

September 3, 2021
Articles, System Sustainability, ,
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03Sep

Do Trade Unions Promote Age Diversity and Intergenerational Solidarity in the Workplace? A View from Canada and Israel

By Pnina Alon-Shenker, Lilach Lurie In this Article, the authors explore – through a survey of collective agreements, case law, unions’ constitutions and websites – how trade unions in Canada and Israel balance and effectively support the interests of older and young workers. While unions in both countries promote age diversity to some extent (Canadian unions more than Israeli unions), they do not take sufficient action to promote intergenerational solidarity and sometimes even inhibit solidarity between generations. The authors conclude...

September 3, 2021
Articles, Labor Market, , ,
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03Sep

Global Pensions and ESG: Is There A Better Way?

By Luba Nikulina The influence of ESG factors has been growing exponentially in the last five years. This paper explores whether purpose with multiple stakeholders, responsibility for the impact of investments, and system level engagement apply to global pension funds. Aside from government spending, global pension assets represent the largest pool of capital on the planet with the longest time horizon and multiple stakeholders across different generations. The power of influence of this capital is enormous. Many international challenges can...

September 3, 2021
Articles, Investment, Pension design, , ,
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August 2021
26Aug

The New Income Projection Rules for Defined Contribution Plans

By Richard L. Kaplan & Barry Federici The SECURE Act enacted at the end of 2019 requires that defined contribution retirement plans provide plan participants will projections of how much monthly income their accumulated balances will generate upon their retirement. This article analyzes the new Labor Department regulations that go into effect on September 18, 2021 and suggests various revisions, including an explanation of likely tax consequences. Source: SSRN 670 views

August 26, 2021
Articles, Pension design, Regulation, , ,
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26Aug

Retirement and Voluntary Work Provision: Evidence from the Australian Age Pension Reform

By Rong Zhu This paper examines the empirical link between retirement and the supply of volunteer labor, using panel data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. To identify the causal impact, we exploit a major reform of the Australian Age Pension which has significantly changed the retirement incentives of older people. We find positive and significant effects of retirement status on the voluntary work provision of older men and women. Longer time spent in retirement...

August 26, 2021
Aging, Articles, Pension design, , ,
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26Aug

A New Look at Racial Disparities Using a More Comprehensive Wealth Measure

By Alice Henriques Volz & Jeffrey P. Thompson Most research measuring disparities in wealth by race relies on data that exclude resources that are disproportionately important to low-wealth and non-white families, namely defined benefit (DB) pensions and Social Security. This paper finds that once these resources are included, disparities in wealth between white families and Black and Hispanic families are substantially smaller and that they are not rising over time. The powerful equalizing roles of DB pensions and Social Security...

August 26, 2021
Articles, System Sustainability, , ,
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23Aug

What is work and how affects retirement?

By Manuel Carvallo In order to properly plan for retirement, we need to have a vision of it. Dreams of our future retirement are never a one size fits all. The retirement vision varies from person to person, and it depends on several factors: personal goals, family situation, and type of work. This last factor will largely determine how one should prepare for retirement. In my previous post I mentioned that retirement plans were originally designed to provide benefits to the long-term employees...

August 23, 2021
Articles, Labor Market, Pension design, ,
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19Aug

Pensions, Income Taxes and Homeownership: A Cross-Country Analysis

By Hans Fehr, Maurice Hofmann & George Kudrna This paper studies the role of pensions and income taxes in determining homeownership and household wealth. It provides a cross-country analysis, using tax and pension policy designs in Germany, the US and Australia. These developed nations have similar incomes per capita but very different homeownership rates, with the US and Australia having much higher homeownership compared to Germany. The question is to what extent the observed differences in homeownership are induced by...

August 19, 2021
Articles, Pension design, Regulation, , , ,
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19Aug

Mega-IRAs, Boon or a Bane?

By Albert Feuer Peter Thiel reportedly converted a 1999 Roth IRA investment of $1,700 in PayPal “founder’s shares,” into assets that appeared to be worth $7 billion on June 30, 2021. There are serious questions whether this IRA and other Mega-IRAs are entitled to the IRA tax benefits. The IRS should have the resources to challenge the tax exemption of any Mega-IRAs appearing to violate the current law. These Mega-IRAs will disappear when the IRS prevails. There should also be...

August 19, 2021
Articles, Pension design, , ,
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