May 2020
22May

How People React to Pension Risk

By Nicolas Salamanca, Andries De Grip, Olaf Sleijpen We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people’s future pension benefits to their pension funds’ funding ratio — a measure of the fund’s financial health — making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and pension-age...

May 22, 2020
Articles, Investment, Pension Management, , , ,
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15May

The End of Leisure and Retirement, COVID-19: Innovations, Jobs, Pensions, and Keynes: Guaranteed Income or Future Poverty and Redundancy?

By Niccolo Leo Caldararo The history of the support by society of the aged is discussed in cross cultural and historical context. Various cultural traditions are compared with the forms developed in complex societies from ancient Egypt and Greece and Rome, to China, the Aztec, Inca and Maya, to those of religious organizations, or those developed under different modern ideological systems like capitalism and communism as well as social democratic nations. It is found that the way a...

May 15, 2020
Aging, Articles, Labor Market, System Sustainability, , , , ,
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15May

Firm Behaviour in Pension Funding – An Analysis of Corporate Debt Issuing

By Marion Boddy This study investigates the commonality of United States firms using the issuance of corporate debt as a tool to fund their pension plans. The results suggest a prominence of firms in the sample utilizing debt issuances to transition their fund from underfunded to overfunded. These results are indicated through a statistically significant negative relationship between the cost of debt and an underfunded indicator when regressors are lagged by one year. Results also indicate that equity issuances...

May 15, 2020
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15May

Selfies can help Brazil create a super supplementary pension

By Arun Muralidhar, Robert C. Merton, Alexandre Vitorino Brazilian policy makers and researchers have discussed the introduction of a complementary pension system to complement the Regime Geral de Previdência Social (RGPS), specially for those that want a retirement income above the RGPS ceiling. This article first recommends that the complementary system must be SUPER (Simple, Universal, Portable, Efficient with low cost and Robust Regulatation). It then proposes the adoption of a financial innovation called SeLFIES (Standard-of-Living, Forward-starting, Income-only Securities),...

May 15, 2020
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08May

Pareto-improving transition to fully funded pensions under myopia

By Torben M. Andersen, Joydeep Bhattacharya, joydeep Bhattachary, Marias H. Gestsson Under dynamic efficiency, a pay-as-you-go (PAYG) pension scheme is often described as an “original sin”: It helps the current generation of retirees but hurts future generations because they are forced to save via a return-dominated scheme. Abandoning it is deemed welfare-improving but typically not for all generations. But what if agents are present-biased (hence, undersave for retirement) and the “paternalistically motivated forced savings” component of a PAYG scheme...

May 8, 2020
Articles, Pension design,
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08May

Reference-Dependent Preferences, Time Inconsistency, and Unfunded Pensions

By Torben M. Andersen In the real world, public pay-as-you-go pension (PAYG) schemes are popular and co-exist with private, retirement-saving schemes. This is true even in dynamically efficient economies where such pensions offer a lower return. The classic Aaron-Samuelson result argues that, in theory, this is impossible. Later work has shown that it may be possible if agents, left on their own, undersave due to myopia or time-inconsistency. In that case, if the government is paternalistic, a welfare rationale...

May 8, 2020
Articles, Pension design, System Sustainability,
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08May

J.P. COVID impact on markets: research update

By Michael Cembales The first table itemizes monetary and fiscal stimulus unleashed by the Federal Reserve and other Central Banks in recent weeks, measured as Central Bank liquidity provisions, new fiscal stimulus programs and rate cuts. For context, new fiscal stimulus and total fiscal deficits in the US are roughly double the levels seen in 2008-2009, and the US fiscal deficit we project for 2020 of 15%-18% is only matched by deficits seen at the height of WWII in 1942-1943. ...

May 8, 2020
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04May

Before And After: FinTech vs. Healthcare Covid-19 Crisis Series

By Stephanie MacConnell for Forbes This is the first in a series of articles comparing the Covid-19 crisis in Healthcare to the financial crisis in 2008 that led to an industry-shaping boom in FinTech. The world before the 2008 financial crisis looked different. Most interaction with a person’s financial institution happened inside of a physical branch and most services for an individual were provided by one bank and perhaps one wealth manager. When banks crumbled and the 401ks of average Americans...

May 4, 2020
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04May

Before And After: FinTech vs. Healthcare Covid-19 Crisis Series

By Stephanie MacConnell for Forbes This is the first in a series of articles comparing the Covid-19 crisis in Healthcare to the financial crisis in 2008 that led to an industry-shaping boom in FinTech. The world before the 2008 financial crisis looked different. Most interaction with a person’s financial institution happened inside of a physical branch and most services for an individual were provided by one bank and perhaps one wealth manager. When banks crumbled and the 401ks of average Americans...

May 4, 2020
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01May

Clearing the Bench: Using Mandatory Retirement to Promote Gender Parity in the U.S. and the EU Judiciaries

By Christine Chambers Goodman Many European Union (“EU”) countries have been particularly adept at implementing antidiscrimination laws that go beyond merely promoting gender diversity, but also toward obtaining gender parity in some areas. These laws, directives, and policies, along with other factors, have expanded the representation of women in the legal profession generally and specifically in the ranks of professional judge positions, such that women constitute a majority, however slight, of judges throughout the EU. On a parallel track,...

May 1, 2020
Articles, Labor Market, Pension design,
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