Research Papers
Event: Banking the Underbanked - May 11th
On Tuesday, May 11, 2010, the Savings and Retirement Forum will be held at the New American Foundation 1900 K Street, Northwest, Suite 110, Washington, DC [Directions to Fidelity], at 8:30am.
Vice President and Community Education Administrator Ammar Askari, Ph.D., with M&I Marshall & [...]
The More the Better? Characteristics and Efficiency of 401(k) Investment Menus
Abstract:
Few previous studies have explored whether defined contribution retirement saving plans offer sufficiently diversified investment menus, though it is likely that these menus significantly shape workers’ accumulations of retirement wealth. This paper assesses the efficiency and performance of 401(k) investment options offered by a large group of US employers. We show that the majority of [...]
The Automatic 401(k): Revenue and Distributional Estimates
One of the most promising aspects of retirement saving policy in recent years is the advent of “automatic” or opt-out features in 401(k) plans. Automatic 401(k)s enable saving even if the worker makes no effort to participate in their 401(k) plan. In a 401(k) plan without automatic features, workers have to actively choose whether or [...]
A Progressivity Index for Social Security
Summary and Introduction:
The Social Security benefit formula has incorporated some measure of progressivity almost since the program’s inception. As early as 1939, amendments to the original Social Security Act stipulated that monthly benefits replace a higher proportion of preretirement earnings for people with lower earnings compared with those with higher earnings (Martin and Weaver 2005). [...]
How Pension Rules Affect Work and Contribution Patterns: A Behavioral Model of the Chilean Privatized Pension System
Abstract:
by Petra Todd and Viviana Vélez-Grajales
WP 2008-193
Chile has been at the forefront of pension reform, having switched in 1980 from a pay-as-you-go system to a fully funded privatized accounts system. The Chilean system served as a model for reform in many other Latin American countries and has also been considered by U.S. policy makers as [...]
How Much Do Respondents in the Health and Retirement Study Know About Their Tax-deferred Contribution Plans? A Cross-cohort Comparison
Abstract:
by Irena Dushi and Marjorie Honig
WP 2008-201
We use information from Social Security earnings records to examine the accuracy of employee reports of annual contributions to tax-deferred pension plans. As employer defined benefit pensions are replaced by voluntary contribution plans, employee understanding of the link between annual contribution decisions and post-retirement wealth is becoming increasingly important. [...]
The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Boomers
Executive Summary
In recent years, the United States has seen a significant shift away from defined benefit (DB) pension plans to defined contribution (DC) plans. This shift may accelerate rapidly, as more large companies, even those with financially solvent plans, freeze their DB plans and replace them with new or enhanced DC plans.
This paper uses the [...]
The Future of DB Plan Funding Under PPA, the Recovery Act and Relief Proposals
The overlay of the dramatic decline in asset values of the last few months on the incipient tougher funding requirements of the Pension Protection Act of 2006 (PPA) has prompted widespread concern about the magnitude of the required contributions to single-employer defined benefit (DB) plans in 2009 and 2010. In this analysis, Watson Wyatt estimates [...]
The Effects of Recent Turmoil in Financial Markets on Retirement Security
Financial markets have experienced substantial stress for over a year. The turmoil emanated from the bursting of the housing bubble, which led to substantial losses on mortgage loans and mortgage-related securities. In part because the mortgage-related securities are complex and in part because future rates of defaults on the individual mortgages underlying those securities are [...]
Why Do Mutual Fund Investors Use Professional Financial Advisers?
About the Survey
The Investment Company Institute undertook a comprehensive survey in 2006 to examine mutual fund shareholders’ use of ongoing, professional investment advice. ICI engaged Northstar Research Partners, an independent research firm, to conduct a telephone survey of 1,003 randomly selected households owning mutual funds outside workplace retirement plans. The survey sample was drawn from [...]
Recessions and Older Workers
Introduction to Paper:
With the economy sliding ever deeper into recession, questions arise about how older workers are faring and how their fate relative to younger workers compares to the past. The answer to these questions turns out to be a little complicated. Two forces are at work. On the one hand, labor force participation among [...]
How Much Risk is Acceptable
Papers Introduction:
The financial crisis has sparked proposals to reform the retirement income system. One component of such a system could be a new tier of retirement accounts. These accounts would augment declining Social Security replacement rates for low-wage workers and provide a buffer of security for middle- and upper-wage workers who, increasingly, will rely totally [...]
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