September 2021
30Sep

Do Tax Deferred Accounts Improve Lifecycle Savings? Experimental Evidence

By John Duffy, Yue Li Tax deferred accounts (TDAs) are an increasingly popular method of saving for retirement, and have become common across many developed countries. Nevertheless, it is unclear whether TDAs actually improve a household's lifecycle savings behavior and retirement preparedness because it is difficult to perform a counterfactual analysis. Households always have other means of savings so there is no guarantee that a TDA, with its inflexible restriction that funds cannot be drawn until retirement, will be attractive...

September 30, 2021
Articles, Pension design, Savings, ,
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30Sep

Progressive Pensions as an Incentive for Labor Force Participation

By Fabian Kindermann, Veronika Pueschel In this paper, we challenge the conventional idea that an increase in the progressivity of old-age pensions unanimously distorts the labor supply decision of households. So far, the literature has argued that higher pension progressivity leads to more redistribution and insurance provision on the one hand, but increases implicit taxes and therefore distorts labor supply choices on the other. In contrast, we show that a well-designed reform of the pension system has the potential to...

September 30, 2021
Articles, Labor Market, Pension design, , ,
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24Sep

Progressive Pensions as an Incentive for Labor Force Participation

By Fabian Kindermann, Veronika Pueschel In this paper, we challenge the conventional idea that an increase in the progressivity of old-age pensions unanimously distorts the labor supply decision of households. So far, the literature has argued that higher pension progressivity leads to more redistribution and insurance provision on the one hand, but increases implicit taxes and therefore distorts labor supply choices on the other. In contrast, we show that a well-designed reform of the pension system has the potential to...

September 24, 2021
Adequacy, Articles, Pension design, ,
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24Sep

One Country, Two Systems: Evidence on Retirement Patterns in China

By John Giles, Xiaoyan Lei, Gewei Wang, Stephen Yafeng Wang, Yaohui Zhao This paper documents the patterns and correlates of retirement in China using a nationally representative survey, the China Health and Retirement Longitudinal Study (CHARLS). After documenting stark differences in retirement ages between urban and rural residents, the paper shows that China's urban residents retire earlier than workers in many OECD countries and that rural residents continue to work until advanced ages. Differences in access to generous pensions and...

September 24, 2021
Articles, Pension design, System Sustainability, , , ,
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20Sep

The Golden Paper to Fix Pension Systems in MENA Region

By Ebrahim K Ebrahim All Arab countries, except for three, have deficits in their pension funds exceeding 50%. As for the three countries, two of them started their social insurance relatively late and the third one had to significantly recapitalize its fund early last decade. Likewise, these three countries are not immune from deficits of similar proportions during the next two decades if they end up doing the same thing. Up until now, there is one thing all Arab countries...

September 20, 2021
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10Sep

The Surprising Ingredients of Swedish Success – Free Markets and Social Cohesion

By Nima Sanandaji Sweden did not become wealthy through social democracy, big government and a large welfare state. It developed economically by adopting free-market policies in the late 19th century and early 20th century. It also benefited from positive cultural norms, including a strong work ethic and high levels of trust. As late as 1950, Swedish tax revenues were still only around 21 per cent of GDP. The policy shift towards a big state and higher taxes occurred mainly during the...

September 10, 2021
Articles, Investment, Pension design, Pension Management, ,
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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

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
31Aug

Focusing on ‘What Should MENA Pension Systems Look Like for Next 50 Years’ Annual Arab Pensions Conference 2021 Convenes in Manama

How should we design the MENA pension systems for the next 50 years? How do we want our children and their children to retire one or two generations from today? This is the theme or big question the highly attended annual Arab Pensions Conference 2021 will be tackling in its next edition on the 16th and 17th of November. Read also Does it Matter to be Informal? Type of employment and political opinions in the MENA region Hosted in Manama digitally...

August 31, 2021
Event, News, Pension design, , , , ,
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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 679 views

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