August 2018

18Aug

The Relationship Between Financial Planner Use and Holding a Retirement Saving Goal: A Propensity Score Matching Analysis

By Kyoung Tae Kim (University of Alabama), Tae-Young Pak (University of Alabama), Su Hyun Shin (University of Alabama) & Sherman D. Hanna (Ohio State University (OSU)) It has been well established in the literature that financial advice leads to informed decision making and improved financial outcomes. However, there is limited evidence regarding the link between financial planner use and attitudes towards retirement saving. As financial planners provide comprehensive advice for the long-term benefits of clients, their clients may become more...

August 18, 2018
Aging, Articles, Labor Market, Pension design, Savings, ,
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09Aug

Why the World’s Biggest Pension Fund Should Buy More Junk Bonds

A former senior economist at the Federal Reserve suggests that the world’s largest pension fund should step out of its comfort zone. Yoshio Nozawa, who researched corporate bond spreads for the Fed over the past five years, said Japan’s Government Pension Investment Fund and its peers should buy more high-yield bonds and alternative assets such as real estate. The pension fund’s long-term performance of its 158.6 trillion yen ($1.43 trillion) in assets is more important than quarterly results, he said. “Investors...

August 9, 2018
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08Aug

Annuity Puzzle: how products are designed matters

By Eduardo Rodríguez Montemayor PPI’s Editorial Board editorial@pensionpolicy.net Getting an annuity with our savings pot at the time of retirement is the only contract that guarantees periodic pension payments for life. Yet, few people do it when offered to option to do so. What explains this puzzle? An annuity is a financial contract that pays out a periodic amount for as long as the annuitant is alive, in exchange for an initial premium. Defined-contribution (DC) pension schemes usually make it voluntary to choose whether to buy an...

August 8, 2018
Articles, Investing, Labor Market, OP Ed, Pension design, PPI’s original Op-Eds, Slider-Left, , , ,
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06Aug

US. 1 in 3 millennials tapped retirement funds for a down payment, study says

Millennials want their dream home. Fifty-six percent of the millennials polled in a new survey from the Bank of the West said owning a home was more of a priority than paying off debt or retiring comfortably. The survey, which included more than 1,000 people, also found that nearly one in three millennial homeowners borrowed money from their retirement funds for a down payment. Is this a smart financial strategy? Justin Moundas, a real estate agent with Douglas Elliman in Manhassat,...

August 6, 2018
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06Aug

Most Americans plan to own homes in retirement, but that might be a mistake

We all have our own respective visions of what life in retirement will look like. For the bulk of Americans, however, that means owning a home. In fact, 85% of current workers say they plan to own during their golden years, according to new data from Voya Financial, while 79% of current retirees are property owners. But while owning during retirement has its benefits, there's one major drawback to also be aware of. Why own during retirement? There are several good...

August 6, 2018
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July 2018

31Jul

Korea. NPS adopting stewardship code

The National Pension Service (NPS), Korea’s largest institutional investor, is adopting a stewardship code that will allow it to engage in management decisions of the companies it invests in. The decision is getting strong opposition from the business community. After holding two meetings since last week, the National Pension Fund Management Committee decided to exercise limited rights when companies it invests in are hurting the interest of its clients, which is the Korean public with pensions, according to the Ministry of...

July 31, 2018
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31Jul

Nigeria nets $26,6b in pension funds

The National Pension Commission (PenCom) said that the total pension fund assets stood at $26.6 billion (about N8.14 trillion) as at May, 2018.The Commission said in a statement signed by its spokesman, Mr. Peter Aghahowa, on Sunday in Abuja that the assets rose from $24.5 billion in December 2017, to $26.6 billion in May 2018. It also said that $16.9 billion had been invested in Federal Government Securities by the Pension Fund Administrators (PFAs). According to the statement, the investment represented...

July 31, 2018
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25Jul

The Role Of The Chilean CCR In Private Equity

The Chilean pension fund system has breached in 2018 the 200bn threshold. Its pension fund system – Administradoras de Fondos de Pensiones – traditionally already very open to investment overseas, has now the potential to increase exponentially the exposure to overseas alternative investments. A recent reform affecting the pension system allows in fact Chilean pension funds now to directly invest as well as co-invest in foreign private equity funds. The Chilean pension regulator - Superintendencia de Pensiones - issued in November 2017 a regulation...

July 25, 2018
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April 2018

09Apr

Best Interests in the Long Term: Fiduciary Duties and ESG Integration

By Susan N. Gary (University of Oregon - School of Law) Two persistent misconceptions continue to affect the way fiduciaries think about sustainable investing: (1) fiduciary duties block a fiduciary investor from considering environmental and social factors and (2) if a fiduciary investor engages in sustainable or responsible investing, the portfolio will suffer financially. An examination of socially responsible investing, ESG integration (an investment process that involves consideration of material environmental, social and governance (ESG) factors together with traditional financial...

April 9, 2018
Articles, Pension design, ,
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March 2018

11Mar

Evaluating Retirement Strategies: A Utility-Based Approach

By Javier Estrada (IESE Business School) & Mark Kritzman (Windham Capital Management) Retirees need to make two critical financial decisions, namely, the withdrawal rate and the asset allocation of their portfolios. We propose a methodology that retirees, and particularly advisors, could use to make these decisions in an optimal way. We introduce a new variable, the coverage ratio, and a theoretical approach, based on utility. Our approach can be used to make optimal decisions during both the accumulation and the...

March 11, 2018
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