February 2017

04Feb

Non-Contributory Pensions and Savings: Evidence from Argentina

By Martín González-Rozada & Hernán Ruffo This paper examines the effects of Argentina’s Plan de Inclusión Previsional (PIP), which changed the pension system in a way that generated a new noncontributory pillar, produced a huge expansion in pension coverage between 2005 and 2008 and a transfer of a vast amount of resources to households. Using a difference in differences methodology it is found that the PIP policy has reduced the incentives to work and to be in the labor force...

February 4, 2017
Adequacy, Articles, Pension design, , ,
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04Feb

What Replacement Rates do Households Actually Experience in Retirement?

By Alicia H. Munnell & Mauricio Soto This paper estimates how much people actually receive in retirement relative to earnings before retirement when all sources of income, including income generated by homeownership, are combined. Previous studies find that middle class people need between 70 and 75 percent of their pre-retirement earnings to maintain their life style once they stop working. The objective of this study is to determine what people are actually receiving in retirement. Regardless of how retirement income and...

February 4, 2017
Articles, Investing, Savings, ,
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04Feb

The Effect of Workplace Pensions on Household Saving: Evidence from a Natural Experiment in Taiwan

By Tzu-Ting Yang Population aging causes financial imbalance in pay-as-you-go public pension programs.To remedy this problem while ensuring the adequacy of retirement savings for employees, many countries complement or substitute for public pensions by regulating workplace pensions. This paper exploits a pension reform in Taiwan that has mandated, since 2005, that all private-sector employers contribute at least 6% of wages to employees' individual pension accounts monthly. I use the workers in the unaffected sector as a comparison group and employ...

February 4, 2017
Aging, Articles, Labor Market, Regulation,
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04Feb

Borrowing from the Future: 401(k) Plan Loans and Loan Defaults

By Timothy (Jun) Lu, Olivia S. Mitchell, Stephen P. Utkus & Jean A. Young Tax-qualified retirement plans seek to promote saving for retirement, yet most employers permit pre-retirement access by letting 401(k) participants borrow plan assets. This paper examines who borrows and why, and who defaults on their loans. Our administrative dataset tracks several hundred plans over 5 years, showing that 20% borrow at any given time, and almost 40% do at some point over five years. Employer policies influence...

February 4, 2017
Labor Market, Savings,
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