May 2020
04May

Top US pension plans eye private credit.

Some of America’s largest pension funds are looking to pour money into private credit to capitalise on dislocations across the market stemming from the coronavirus pandemic. Both the $227bn California State Teachers Retirement System (Calstrs) and the $215bn New York State Common Retirement Fund have identified private credit as an opportunity for investors that have enough liquidity to lend to struggling companies. Meanwhile, data from FT Specialist publication MandateWire shows that numerous other public funds in the US are...

May 4, 2020
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01May

Clearing the Bench: Using Mandatory Retirement to Promote Gender Parity in the U.S. and the EU Judiciaries

By Christine Chambers Goodman Many European Union (“EU”) countries have been particularly adept at implementing antidiscrimination laws that go beyond merely promoting gender diversity, but also toward obtaining gender parity in some areas. These laws, directives, and policies, along with other factors, have expanded the representation of women in the legal profession generally and specifically in the ranks of professional judge positions, such that women constitute a majority, however slight, of judges throughout the EU. On a parallel track,...

May 1, 2020
Articles, Labor Market, Pension design,
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01May

An Equilibrium Theory of Retirement Plan Design

By Ryan Bubb and Patrick L. Warren We develop an equilibrium theory of employer-sponsored retirement plan design using a behavioral contract theory approach. The operation of the labor market results in retirement plans that generally cater to, rather than correct, workers' mistakes. Our theory provides new explanations for a range of facts about retirement plan design, including the use of employer matching contributions and the use of default contribution rates in automatic enrollment plans that lower many workers' savings....

May 1, 2020
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01May

US. How The Pandemic Is Making The Retirement Crisis Worse — And What To Do About It

The coronavirus crisis has torn the Band-Aid off the financial fragility of many Americans. With an unemployment rate between 15% and 20%, bank accounts draining, and the Dow down 23% in the first quarter, things are dreadful for millions of people. But Americans in their 50s and 60s nearing retirement may be among the most endangered. Many already weren’t on track for retirement, with little or no savings. Now, the COVID-19 downturn threatens to further undermine America’s vulnerable public...

May 1, 2020
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April 2020
29Apr

What the Economic Downturn Could Mean for Pension Plans

By Mark Miller Investing guru Bill Bernstein has compared investors in defined-contribution plans to airline passengers sent to the cockpit to fly the plane. Bernstein would much prefer a retirement system that relies on defined-benefit pensions, with their professional management and automatic participation. The unfolding coronavirus crisis underscores the value of professional pension pilots--and the structure of defined-benefit plans, which don't rely on short-term market performance to meet near-term obligations. The same claim cannot be made for the 401(k) or IRA...

April 29, 2020
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28Apr

How Has COVID-19 Affected Retirement Income Adequacy?

Considering the recent market volatility and related economic fallout, new research by EBRI finds that the impact still appears to be recoverable.   In an April 21 Issue Brief, “Impact of the COVID-19 Pandemic on Retirement Income Adequacy: Evidence from EBRI’s Retirement Security Projection Model,” EBRI examines how the 2020 market crisis along with potential behavioral responses and decreases in DC plan eligibility could affect overall retirement deficits.  While emphasizing that the analysis is not meant to minimize the potential impact on...

April 28, 2020
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27Apr

US. Coronavirus’ Impact on Retirement Money in the Market

The COVID-19 crisis has taken a major toll on the U.S. economy, and has been battering the stock market since the virus started spreading rapidly in March. It's not shocking, then, to learn that 401(k) and IRA balances have taken a hit. The average 401(k) balance fell to $91,400 during the first quarter of 2020, according to Fidelity. That's a 19% or $20,900 drop from the fourth quarter of 2019. IRAs didn't fare all that much better. The average IRA balance fell to $98,900 in...

April 27, 2020
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24Apr

Does Retirement Affect Voluntary Work Provision? Evidence from England, Ireland and the U.S

By Peter Eibich, Angelo Lorenti, Irene Mosca Voluntary work is an important contribution for many non-profit organizations, such as charities, political and religious organizations. Older individuals make up a sizable share of the volunteer workforce, and volunteering is often regarded as an example of "active ageing". In this study, we examine whether retirement has a causal effect on the frequency of voluntary work provision in three English-speaking countries - England, Ireland and the U.S. We draw on data from...

April 24, 2020
Aging, Articles, Labor Market, , ,
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24Apr

Coronavirus will make US cities feel the pressure of pension debt

Municipal pension debt is among the many aspects of the economy that have been severely impacted by the coronavirus pandemic. COVID-19 not only exposes, but also further threatens the already-weak fiscal health of municipal retirement plans. Inaction on this front could mean insolvent pension plans dragging some of the nation’s largest cities into bankruptcy. After all, when the stock market takes a hit, so do pensions. This is because most of the typical pension funds’ income is from returns...

April 24, 2020
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23Apr

EBRI: Pandemic likely to worsen U.S. retirement savings deficit

The impact of the coronavirus pandemic on U.S. retirement readiness using middle-of-the road risk assumptions appears to be manageable, according to projections by the Employee Benefit Research Institute. EBRI estimates that the $3.68 trillion aggregate retirement deficit for all U.S. households age 35-64 will increase by 4.5% or $166.2 billion if market losses for the year are equivalent to first-quarter 2020 losses, a risk assumption that EBRI defines as intermediate. Under EBRI's pessimistic scenario, that in which market losses...

April 23, 2020
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