October 2020

23Oct

Reconsidering Risk Aversion

By Daniel J. Benjamin, Mark Alan Fontana, Miles S. Kimball Risk aversion is typically inferred from real or hypothetical choices over risky lotteries, but such “untutored” choices may reflect mistakes rather than preferences. We develop a procedure to disentangle preferences from mistakes: after eliciting untutored choices, we confront participants with their choices that are inconsistent with expected-utility axioms (broken down enough to be self-evident) and allow them to reconsider their choices. We demonstrate this procedure via a survey about...

October 23, 2020
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23Oct

The Changing Nature of Work and Public Pension Coverage: Evidence from the US and Europe

By Axel H. Börsch-Supan, Courtney Coile, Jonathan Cribb, Carl Emmerson, Yuri Pettinicchi We examine non-standard work and its impact on pension coverage via a case study of the US, the UK, and Germany. We find that the share of workers engaged in non-standard work has changed only modestly over time in these three countries, despite the popular perception that a more significant transformation in the nature of work may be underway. We discuss how non-standard work may affect public...

October 23, 2020
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23Oct

US. The DOL’s ESG Proposal and DB Plans

There´s a lot of money in corporate defined benefit (DB) plans, and it can make a difference how those assets are invested. Cooper Abbott, president and chairman of Carillon Tower Advisers, notes that the Department of Labor (DOL) oversees employee benefit plans that represent approximately $10 trillion in combined assets under the Employee Retirement Income Security Act (ERISA). Of this total, about $8 trillion is in mutual and other funds, and about $2 trillion is in directly...

October 23, 2020
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23Oct

How Well-Prepared Are Pension Funds for Climate Risk?

A major report recently released by United States federal regulators warns that climate change is starting to disrupt U.S. financial markets, as the costs of wildfires, floods and droughts penetrate insurance and mortgage markets. The report by the bipartisan Commodity Future Trading Commission (CFTC) lays out how escalating climate risks could threaten pension payouts over the coming decades. Divya Mankikar is an investment manager at CalPERS, the public pension for California’s public employees and the world’s largest pension...

October 23, 2020
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22Oct

US. Pension Fund Freezes New Investment With Apollo Over Founder’s Epstein Ties

A pension fund for Pennsylvania teachers said it had frozen new investments with Apollo Global Management amid concerns about ties between its founder, Leon Black, and Jeffrey Epstein. The $63 billion Pennsylvania Public School Employees’ Retirement System said it spoke with Apollo officials last week after a New York Times report detailed the financial ties between the two men. Mr. Black made at least $50 million in payments and donations to entities affiliated with Mr. Epstein in the years...

October 22, 2020
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20Oct

US. Employers Need to Reinvent Retirement-Savings Match

One of the building blocks of the U.S. retirement savings system is the employer match. If workers contribute to their retirement savings, 54% of employers will contribute as well, according to a recent report by the Plan Sponsor Council of America (PSCA). By helping people prepare for retirement, the match boosts the financial security of workers while giving employers additional workforce flexibility. The recession threatens to undermine the employer match as we know it. According to a survey by...

October 20, 2020
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15Oct

Financial Literacy and Financial Decision-Making at Older Ages

By Joelle H. Fong, Benedict S. Koh, Olivia S. Mitchell, Susann Rohwedder How well older households manage their wealth holdings is an important determinant of their financial security during retirement, yet little is known about their financial decision-making and how this relates to their financial literacy. Our paper fills this gap by measuring financial literacy among older persons in the Singapore Life Panel and examining its association with timely credit card debt repayment, stock market participation, and age-based investment...

October 15, 2020
Aging, Articles, ,
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15Oct

US. Real estate investments cost NYC pension funds $370M

In a big investment portfolio, some part of it will inevitably underperform. For the city’s biggest pension fund, that part has been private equity real estate. The New York City Employees’ Retirement System ramped up its exposure to that category, only to see it underperform the stock market by $260 million and rack up at least $110 million in fees between 2016 and 2019, New York Focus reported. During those years, the fund increased its portfolio in private equity...

October 15, 2020
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14Oct

US. Deaths of despair: Not everyone benefits from the ‘longevity economy’

America recently passed a grim milestone of over 210,000 COVID-19 deaths, with little hope the pandemic will come under control soon. While the coronavirus has been devastating to those who’ve lost loved ones, it has also exacted a vicious toll on a particular group of older Americans: lower-wage workers, minorities and women who have labored for decades in jobs with unstable incomes and without employee benefits. Read also 5 retirement security risks that 2020 made worse We hear a lot...

October 14, 2020
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12Oct

Thanks to the Coronavirus, There’s a New Barrier to Retirement Savings

Saving for retirement is hard enough for most Americans, many of whom have far too little money set aside. Unfortunately, the coronavirus pandemic has thrown another wrench into the works: Millions of parents across the country have been left without good child care options. In fact, according to a July study from E*Trade Financial, 46% of parents indicated child care was a barrier to retirement, up six percentage points compared with the first quarter, before the pandemic set in....

October 12, 2020
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