January 2021

21Jan

Executive Compensation: The Trend Toward One Size Fits All

By Felipe Cabezon This paper reports the prevalence of a “one-size-fits-all” trend in the structure of executive compensation plans. The way firms distribute total compensation across different components of pay –salary, bonus, stock awards, option awards, non-equity incentives, pensions, and perquisites– is becoming more similar since 2006. In particular, 25% of the variation across firms disappeared in the last ten years. Using close votes surrounding Say-on-Pay’s implementation, I find that shareholders’ influence on management decisions causes part of this...

January 21, 2021
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21Jan

Olivia S. Mitchell, PhD: Calibrating Retirement Planning with Current Conditions

By Olivia S. Mitchell In September 2020, Robert Powell, editor-in-chief of the Retirement Management Journal, Jason Fichtner, PhD, senior lecturer at the Johns Hopkins University; and Anna Rappaport, FSA, MAAA, chair of the Society of Actuaries Committee on Post-Retirement Needs and Risks, spoke with Mitchell about how longer lifespans and prolonged retirement periods are requiring adjustments to Social Security benefits, employee pension plans, and individual retirement savings. Source: SSRN

January 21, 2021
Adequacy, Aging, Articles, Pension design, , ,
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21Jan

US. Pandemic Puts More Households at Risk in Retirement

The National Retirement Risk Index (NRRI), calculated every three years, measures the share of American households that are at risk of not being able to maintain their pre-retirement standard of living in retirement. “Since the Great Recession, the NRRI has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, roughly half of households are at risk,” according to the Center for Retirement Research at...

January 21, 2021
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18Jan

US. Reforming public pensions

By Nadeem Jeddy Government employees need lifelong incomes to stay independent and promote public interest. Private employees serve no higher cause. Replacing public pensions with traditional defined contribution (DC) schemes like Voluntary Pension System (VPS) and provident funds (PFs) will destroy the security of lifelong incomes. Government employees will be forced to take greater interest in personal finance. New forms of malfeasance will emerge that will be hard to catch and difficult to reverse. A better alternative would be to offer...

January 18, 2021
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15Jan

Why BlackRock’s CEO Says the Retirement Crisis Is Getting Worse

Even as BlackRock’s earnings surged in 2020, with the world’s largest asset manager benefiting from increased saving and investment, the coming retirement crisis in the U.S. is getting worse, BlackRock CEO Larry Fink said. Read also Swiss APK designs new climate strategy for investments The three reasons are low interest rates, low savings rates, and more part-timers and self-employed people in the economy. Partly because of the low U.S. household savings rate, Fink said he believed the U.S. has required...

January 15, 2021
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14Jan

How climate change is ruining retirement across the US

Jay Gamel, 76, still talks about his Northern California home in the present tense, as if nothing had happened. “The place is a paradise by any measure,” says Gamel, who is semiretired. “The mountains are beautiful, the surroundings are gorgeous. It’s a postcard.” For 26 years, Gamel had lived in — no, reveled in — his little redwood cabin in the Sonoma County town of Kenwood, where he edits a twice-monthly local newspaper. Gamel, who moved there from Chicago,...

January 14, 2021
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13Jan

US Pension Spending Supports $1.3 Trillion in Economic Output

While public and private defined benefit (DB) pensions are often criticized by politicians and executives as being too expensive to support, a new report from the National Institute on Retirement Security (NIRS) highlights the major impact pensions have on the US’s economic output. According to the report, private and public sector DB pensions in the US generated $1.3 trillion in total economic output in 2018, supported nearly 7 million US jobs, and added nearly $192 billion to federal, state,...

January 13, 2021
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12Jan

US. Strong End to 2020 Puts DB Plan Funded Status Back to Where It Started the Year

The funded status of the nation’s largest corporate pension plans started and finished last year at the same level, as declining interest rates caused pension obligations to grow, offsetting gains from investments in equities and bonds, according to an analysis by Willis Towers Watson. Willis Towers Watson examined pension plan data for 366 Fortune 1000 companies that sponsor U.S. defined benefit (DB) plans and have a December fiscal-year-end date. Results indicate that the aggregate pension funded status is estimated...

January 12, 2021
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11Jan

Pension crisis hits families in Indiana and across the US

Did you know that several families in our community, state and across America, including mine, are facing the loss of our pensions in the very near future? A recent estimate is that 1 million plus pensioners that have “Multi Employer Pension Plans” are trying to survive this crisis. These pensions, for which we worked longer hours, increased productivity and gave up wages, should have been considered sacred and above all, guaranteed. Reflect for a moment about the stress on...

January 11, 2021
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08Jan

A Retirement Dashboard for the United States

By David John, Grace Enda, William G. Gale, J. Mark Iwry Navigating the retirement system is not easy for many workers, in the U.S. or abroad. Following several other countries, we advocate creating a retirement dashboard for the United States to help savers manage their retirement preparations. A dashboard would include an online registry letting each worker track their retirement accounts and benefits. It could also offer services such as recovering and consolidating lost accounts, projecting future income, or...

January 8, 2021
Articles, Innovation, Pension design,
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