December 2024
06Dec

Latin America Lags in Establishing Sovereign Funds, Report Finds

A recent report from the International Forum of Sovereign Wealth Funds investigated why Latin America lags behind other emerging markets in developing sovereign wealth funds beyond stabilization funds. “It is striking that, in Latin America today, there are 12 sovereign wealth funds, nearly all of which are traditional stabilization funds,” the report stated. Unlike most sovereign wealth funds, stabilization funds can be drawn on by governments to reduce the impact of volatile revenue on the economy. Because the assets in the funds might...

December 6, 2024
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04Dec

Pension Markets in Focus 2024

By Organisation for Economic Co-operation and Development Pension Markets in Focus provides detailed and comparable statistics on asset-backed pensions around the world. This publication aims to help policy makers, regulators and other stakeholders evaluate the design and operation of pension systems, and to support policy discussions through international comparisons. Pension Markets in Focus is published annually. A preliminary version is published in June based on initial data on selected variables, and the final version in the last quarter of the year based on...

December 4, 2024
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November 2024
29Nov

Chinese Pension Insurance, Risk Attitudes, and Household Asset Allocation

By Hua Chen, Han Xiao, Yunxiao Guo & Ding Li Optimising household asset allocation is vital for expanding domestic demand in developing countries. This study uses 2017, 2019, and 2021 China Household Finance Survey (CHFS) data to explore pension insurance's effect on asset allocation among Chinese households. Key findings include that higher pension balances encourage investments in riskier assets. Specifically, for every 10% increase in pension account balances, the likelihood of investing in the risk asset market rises by 5%, and...

November 29, 2024
Articles, Investment, , ,
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22Nov

Do Pensions Enhance Worker Effort and Selection? Evidence from Public Schools

By Michael Bates & Andrew C. Johnston Why do employers offer pensions? We empirically examine two theoretical rationales, namely that pensions improve worker effort and worker selection. We test these hypotheses using rich administrative measures on effort and output for teachers around the pension-eligibility notch. When workers cross the notch, their effective compensation falls by roughly 50 percent of salary, but we observe no reduction in worker effort or output. This implies that pension payments do not increase effort. As for selection, we find...

November 22, 2024
Articles, Labor Market, ,
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15Nov

Rethinking Pension Reform

By Giulia Giupponi & Arthur Seibold Population ageing is exerting unprecedented fiscal pressure on social security systems around the world. In response, many governments are implementing or planning pension reforms, often aimed at encouraging later retirement. A long-standing literature in public economics and labour economics investigates how the design of pension systems affects individual labour supply and retirement choices. In recent years, this literature has seen a revival, with a wave of new studies from Europe and the US combining high-quality...

November 15, 2024
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15Nov

Pension’s Resource-Time Trade-Off: The Role of Inequalities in the Design of Retirement Schemes

By Renaud Bourlès & Santiago Lopez-Cantor Public pension schemes serve as mechanisms for inter-temporal income smoothing and within-cohort redistribution. This paper examines the influence of income and lifespan inequalities on the structure of a democratically chosen pension scheme. We use a probabilistic voting model where agents vote on the size and the degree of redistribution (i.e. the Beveridgean factor) of pension and can supplement it with voluntary contributions. Our analysis reveals that when all agents can supplement the public scheme...

November 15, 2024
Articles, Pension design, , ,
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15Nov

Lessons on strengthening pensions and social insurance for sustainable development

By Gustavo Demarco, Gonzalo Reyes, Diego Wachs & Aaron Buchsbaum In today's rapidly evolving world, robust pension systems and social insurance programs are vital for ensuring economic stability, financial inclusion, and the well-being of citizens, particularly in the face of aging populations. Understanding the multifaceted benefits of these systems, as well as the challenges in implementing sustainable pension systems, is crucial for informed policymaking. The World Bank is responding by revitalizing its in-depth training courses for government officials. In a recent course, experts...

November 15, 2024
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05Nov

CPF unveils new fund to support Kenya’s unpensionable workers

CPF Financial Services has introduced the Taifa Pension Fund, a new pension scheme targeting Kenya’s unpensionable workforce across both private and public sectors. The fund, managed by Standard Investment Bank, provides flexible retirement solutions for those without traditional pension access, such as informal sector workers. Taifa Pension Fund offers a range of benefits including high returns, global market exposure, and diversified investment opportunities. It serves as an umbrella fund, allowing participating employers to pool resources, thus reducing the overall cost per member...

November 5, 2024
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October 2024
28Oct

Will the Pensions Review herald long overdue integrated policy making?

The new government has laudable ambitions, but will it do more than simply “firefighting”? Pensions are a priority, judging by its speed in launching ‘a landmark’ review to boost investment, increase pension pots and tackle waste. Led by the first ever joint Treasury and DWP pensions minister Emma Reynolds, it is initially investigating scale, consolidation, the role of the single employer trust, master trusts and GPPs with their different governance structures of trustees and IGCs. The call for evidence for this, the first...

October 28, 2024
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11Oct

Rules of Thumb and Retirement Accounts

By Vanya Horneff, David A. Love & Raimond Maurer We examine the welfare costs of applying common rules of thumb for saving, investment, 401k contributions, and withdrawals in an environment that includes a realistic treatment of taxation, Social Security benefits, 401k-plan details, and uncertainty in income, longevity, and asset returns. We test the performance of commonly recommended rules, such as investing 100-minus-age percent of assets in stocks, contributing 6–10% of income to a 401k account, or withdrawing the required minimum...

October 11, 2024
Articles, Pension design, ,
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