February 2020

15Feb

Target Date Funds and Portfolio Choice in 401(k) Plans

By Olivia S. Mitchell, Stephen P. Utkus Target date funds in corporate retirement plans grew from $5B in 2000 to $734B in 2018, partly because federal regulation sanctioned these as default investments in automatic enrollment plans. We show that adopters delegated pension investment decisions to fund managers selected by plan sponsors. Including these funds in retirement saving menus raised equity shares, boosted bond exposures, curtailed cash/company stock holdings, and reduced idiosyncratic risk. The adoption of low-cost target date funds...

February 15, 2020
Articles, Investment, Pension design, , ,
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January 2020

24Jan

Achieving Investment Excellence: A Practical Guide for Trustees of Pension Funds, Endowments and Foundations

By Kees Koedijk, Alfred Slager, Jaap van Dam Achieving Investment Excellence offers trustees and asset managers a comprehensive handbook for improving the quality of their investments. With a stated goal of substantially and sustainably improving annual returns, this book clarifies and demystifies important concepts surrounding trustee duties and responsibilities, investment strategies, analysis, evaluation and much more. Low interest rates are making the high cost of future pension payouts fraught with tension, even as the time and knowledge required to...

January 24, 2020
Books, Investment, Pension Management, ,
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24Jan

Man versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations

By Braiden Coleman, Kenneth J. Merkley, Joseph Pacelli Advances in financial technology (FinTech) have revolutionized various product offerings in the financial services industry. One area of particular interest for this technology is the production of investment recommendations. Our study provides the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analysts differ from traditional “human” research analysts across several dimensions. First, Robo-Analysts collectively produce...

January 24, 2020
Articles, Investment, ,
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10Jan

Sustainable Investing in Equilibrium

By: Lubos Pastor, Robert F. Stambaugh, Lucian A. Taylor We present a model of investing based on environmental, social, and governance (ESG) criteria. In equilibrium, green assets have negative alphas, whereas brown assets have positive alphas. The ESG investment industry is at its largest, and the alphas of ESG-motivated investors are at their lowest, when there is large dispersion in investors' ESG preferences. When this dispersion shrinks, so does the ESG industry, even if all investors' ESG preferences are strong....

January 10, 2020
Articles, Investment, Sustainability, ,
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03Jan

Pension Actuarial Mathematics

By Philip Martin McCaulay This 40-page publication on pension actuarial mathematics covers topics such as (I) interest and mortality, (II) cost methods, (III) amortization and contributions, and (IV) Duration and Convexity. Part I on interest and mortality includes mortality rates and survival functions, the theory of interest, commutation functions, and life annuity factors. Part II on cost methods includes the Unit Credit (UC) Cost Method, the Projected Unit Credit (PUC) Cost Method, the Entry Age Normal (EAN) Cost Method,...

January 3, 2020
Books, Investment, Pension design, Savings,
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November 2019

29Nov

The Future of Pension Plans in the EU Internal Market: Coping with Trade-Offs Between Social Rights and Capital Markets

By Nazaré da Costa Cabral, Nuno Cunha Rodrigues This edited volume takes a closer look at various European pension-plan models and the recent challenges, trends and predictions related to the design of such schemes. The contributors analyse new ideas, both from national governments and European institutions, and consider current debates on topics such as the Capital Markets Union (CMU) and the so-called ‘European Pillar of Social Rights’ – calling for a new approach to social policy at the European level...

November 29, 2019
Books, Investment, Pension design, , ,
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04Nov

Stewardship in the UK – The 2019 Draft Stewardship Code in Context

By Eva Micheler (London School of Economics - Law Department) The article interrogates the idea of creating a market for stewardship and identifies obstacles that stand in the way of such a market. In particular tax relief for pension investments deprives pension investors from an incentive to monitor investment and demand stewardship activity by their service providers. By granting tax relief the government has become a financial contributor to and a stakeholder in the financial services industry that services pensions....

November 4, 2019
Articles, Investment, Regulation, Supervision, , ,
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October 2019

25Oct

Measuring Household Wealth in the Panel Study of Income Dynamics: The Role of Retirement Assets

By Daniel Cooper, Karen E. Dynan, Hannah Rhodenhiser While the Panel Study of Income Dynamics (PSID) has much to offer researchers studying household behavior, one limitation is that its summary measure of wealth is not as broad as those of other commonly used surveys, such as the Survey of Consumer Finances (SCF), because it does not include the value of defined-contribution (DC) pensions. This paper describes the pension data available in the PSID and shows how they can be...

October 25, 2019
Articles, Investment, Savings, ,
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22Oct

IOPS Supervisory Guidelines on the Integration of ESG Factors in the Investment and Risk Management of Pension Funds

Published today, IOPS Supervisory guidelines on the integration of ESG factors in the investment and risk management of pension funds highlight a range of challenges to be met by pension funds governing bodies, asset managers and pension supervisors. Environmental, Social and Governance (ESG) factors are key and timely issues for the investment and risk management of pension funds, whose consideration is relatively new in the landscape of regulatory frameworks of pension funds worldwide. They are also dynamically evolving and...

October 22, 2019
Books, Investment, Pension Management, Regulation, , , ,
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18Oct

2019 Salary & Retirement Report-Finance & Banking Positions

By Craig Barnes The 2019 Salary & Retirement Report-Finance & Banking Positions is published annually with the most accurate salary data for over 20 positions in Executive functions. The report features national median salaries for each position, percentiles (10%, 25%, 75%, 90%) and median salary by age. The retirement planning data in the report includes: -401k Matching Funds by Age and Matching Percent -401k Fast Track "Aggressive" Cumulative Funds -401k Fast Track "Moderate" Cumulative Funds -401k Fast Track "Protected"...

October 18, 2019
Books, Investment, Reports, ,
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