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PensionReforms keeps the front page thumbnail (and link to the abstract) of every publication reviewed. The front page is limited to about 50 listings to speed the initial load. As thumbnails come off the front page, they will be kept here in descending “publication date” order. If you “sort” or “search” abstracts, PensionReforms includes all abstracts listed on both the front page and here.

Setting 'ideal' target retirement incomes at a national level is a difficult business. The major 2012 UK changes make this is a topic of some interest. Top down approaches to this issue are likely to be less informative than actually asking. The numbers do not look great in the UK on this basis. more

The Danish pension system is complicated. The ATP is a small part by benefits delivered at retirement but makes up for that by its complexity. The system as a whole seems doubtful about the ATP's role, as well it might. more

A World Economic Forum report tries to widen the debate on the challenges of ageing populations. There is much new language, some ideas for debate but much that is familiar. It thinks universal pensions are good but only for "low income" countries. more

Most studies attribute non-participation in Tier 2 schemes to labour market characteristics (informal/part-time employment) or employers' decisions. But workers might choose not to join and take jobs where 'mandatory' contributions are easily evaded. "Compulsory" may in fact mean "if I want to". more

A New Zealand government report looks at poverty measures based on household incomes both before and after housing costs. Despite having little income other than the Tier 1 pension, the old are faring relatively better than other groups. more

The World Bank takes a third major look at national pension design issues. It's a step in the right direction because its 1994 recommendations seem not to be working in countries that have followed the formula. "Social pensions" might be the answer but more research is needed. more

A financial services provider has looked at New Zealand's environment and made a number of recommendations - Tier 1 will be unaffordable so must be reduced; improve tax breaks for saving; make annuities affordable; improve home equity release. The trouble is with the evidence. more

In the US, current age-based pension qualifications should instead relate to 'remaining life expectancy'. Among other things that would see the State Pension Age step out with improving life expectancy. Not only will that help growth, it would make pensions less expensive and relatively more affordable. more

New financial products, leverage and the greater connectivity of financial markets all contributed to the global economic crisis. Regulation and credit rating agencies were also found wanting. Perhaps economists' belief in the rational representative agent was also misplaced. Popular modelling tools are seemingly mired in the past. more

Taxpayers' money is saved following an increase in the State Pension Age when publicly financed pensions are deferred. A natural experiment in Portugal shows that hiring policies by firms are also affected. The state may (but may not need to) pick up some of the consequential costs. more

US Social Security delivers lower income earners higher benefits, relative to income. That's the theory. In practice, many low earners receive low replacement rates. A flat dollar pension (plus a Tier 2 top-up) would more effectively direct protection where it is needed. more

All developed countries give concessionary tax treatment to retirement savings. In some cases, like Australia, the concessions' cost is very large but at least Australia counts it - most don't. Do the recipients of this middle class welfare need it? Might there be a better way of organising it? more

Some think that encouraging older workers to retire improves opportunities for the young. Not so - older retirements are unconnected with employment rates of the young. In fact it seems to be the other way round. More older workers seems to mean more opportunities for the young. more

In the US, micro-economic measures of wealth have diverged in recent years from macro-economic measures of saving. There seem to be signs of greater decumulation at older ages but 'saving' and wealth seem less connected now than they were. more

In Canada, the investment behaviour of Tier 3 schemes has changed over the 15 years to 2006 - more foreign investments and fewer local bonds; more trading gains on shares than dividends; increased investment in private equity and closer attention to corporate governance issues. more

Governments make rules, some of them very intricate, about the assets that retirement saving schemes can buy. The OECD summarises the rules in its member countries (and some others). The rules presumably try variously to protect the government, scheme managers and members. The 'why?' isn't analysed. more

Retirement income systems should aim to eliminate poverty amongst the old. Amongst the rich countries, the OECD finds that poverty levels can be very high for those "of retirement age". Poverty levels may not be correlated with the amount of a country's "social spending". The data need careful handling. more

Australia's compulsory Tier 2 scheme is actuarially "fairer" than its PAYG Tier 1 pension. Making citizens pay for their own pensions reduces taxes on capital so should improve growth but recent tax changes might lower participation rates. Changes seem needed. more

Singapore's Central Provident Fund is one of the largest, oldest compulsory Tier 2 schemes. Until 1993, nearly all the invested money was lent to the government on favourable terms. Now, savers can choose to put the money into unit trusts that cost more than they should. more

Australia is one of the few countries to count the cost of tax incentives for retirement saving. It's now 20% of all tax revenue and totals 92% of the total amount spent on the Tier 1 "Age Pension". The concession is very regressive and almost demands reform. more

Risk-based supervision of pension schemes is the rule in a limited number of countries. The challenges faced by four countries (South Africa, Kenya, Croatia, Germany and the UK) offer lessons to others. more

Chile's 1981 pension reform created individual accounts for its compulsory Tier 2. A 2008 reform increases the generosity of Tier 1 pensions, but was the reform useful or necessary? Probably both. more

Vanuatu is another of the five Pacific micro-states looked at by the ILO from a social security perspective. It is probably the poorest with either no or low levels of formal social protection. It faces large challenges with few options. more

When financial service providers design saving schemes, it should not be surprising if higher cost options predominate among choices made available to savers. So it seems with US 401(k) schemes. As well, savers might not know what's good for them. more

Much discussion about pension reform is based on analytical errors, tunnel vision, inadequate use of models and improper analysis of economic principles. Many claims for reform simply won't be realised. There is no single, catch-all solution - a 'first best' approach doesn't and won't work. more

Projections made in the US to 2040 seem to indicate a greater disparity in total retirement wealth (public and private provision together) than in the early 2000s. Not much real change at the bottom but a lot at the top, due mainly to rising 401(k) wealth.
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One way some Americans move from fulltime work to fulltime retirement is through a process called 'phased retirement' (as opposed to 'partial retirement'). Just how might that be defined and why should we be interested in it? more

A largish group of UK investment professionals seemed to avoid the excesses of the property boom as part of their retirement savings portfolios. Their investment in housing tended to be for living in, not for retirement income. more

Baby boomers will have more Defined Contribution-style assets and will need to spread them out over their retirement. Annuities can insure both the investment and mortality risks so why aren't they more popular in the US? more

When a country introduces a compulsory retirement savings scheme, 'new' saving might be at least partly at the expense of 'existing' saving. For Mexico, so it turns out. More rules seem needed. more

The UK is thinking about institutional support for the new "personal accounts" that start in 2011. For public credibility, it needs to be independent and use available expertise. Research offers some pointers for its development. more

Both Latin America and China are trying to change PAYG Defined Benefit pension systems to Defined Contribution, Tier 2 arrangements. Neither seems to be working well so what might the lessons be for both those countries and others? Don't start from here seems one of them. more

Modern, socially conscious governments often need to know what to offer citizens in the way of material support when they can't manage this themselves. In the UK, a "minimum income standard" is a new tool to show the cost of basic goods and services for different household types. more

Economic models can help us to understand the relative merits of different policy options. A 54 year global analysis is run forward to 2050 to see how returns to capital and wages might be affected by demographic change. However, it gets very complex, perhaps too complex. more

Americans are told they aren't saving enough for retirement. Numbers on that are usually based on income replacement rates. A life-cycle model produces very different results - only 3.6% of households aren't saving "optimally". more

The IMF has reviewed the progress of pension reforms in Latin America. In many ways, they have not been as successful as had been hoped. Chile may be an exception but then again, may be not. more

The Trustees of the US Social Security system issue regular actuarial reports. The 2008 report shows that the Trust Fund will run out of money in 2041. To restore "solvency" contribution rates need to go up. Do they? more

Voters seem to prefer social security systems that are pay-related (less redistributive) over those that are flat-rate (more redistributive). Linking benefits to contributions seems more acceptable to the "median voter". But what if there are no contributions? more

The words 'pension' and 'crisis' seem inexorably associated with 'aging populations' but politicians haven't really done much to address the issues. We need to re-think the social contract. Consensus should be the foundation and we may need a new framework for the debate. more

Deciding to have a pension in a poor country is one thing; delivering it is another. Nepal started a very modest universal pension in 1995-96. Despite its universality, actual coverage is only about 77% but that varies somewhat by regions. more

Protecting US Social Security incomes against inflation can be done in several possible ways. Understanding the bases reveals the difficulties so leaving things as they stand seems the preferred option. That doesn't make it the best option. more

Past Italian evidence had apparently failed to connect respondents' ages with reports of the impact of financial incentives on retirement decisions. Past studies were apparently flawed - older Italians seemingly behave in expected ways. more

The World Bank reviews the Latin American experience of compulsory Tier 2 retirement saving schemes. As a principal proponent of the now "five pillar" pensions solution, including compulsion, it seems a pity the World Bank can't find more encouraging evidence. more

The proportions of older people who continue working beyond the State Pension Age are growing in many developed countries. Often, it's not about the money. US data also indicate that work improves overall well-being. That's good for everyone, including the economy. more

Commentators in New Zealand worry about the amount of housing in household balance sheets. Data from a new longitudinal study suggests that policymakers need not be so concerned. more

Changes in pensions tend to be incremental in the developed countries. France shows how governments avoid political repercussions by making changes slowly - perhaps not fast enough though. It's "protest avoidance" rather than "blame avoidance".
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The Irish government is looking at most aspects of state and private pensions. This 252 page strategy paper poses many questions and offers some indication of what's in store for Irish pensioners, savers and employers. Probably more of the same. more

Unless governments know whether citizens are saving 'enough', they shouldn't really be debating how to fix the 'problem' of supposed undersaving. Rising retiree health care costs seems to be the major issue in the US. more

Before state pension systems, the income or material support that the old required came from the local community, the family or from the retired themselves. Otherwise they kept working or starved. There were some positive aspects to this 'local' regime; but then again ... more

Annuities can help retirees to avoid unintended bequests. In the US, more annuity wealth as a proportion of all wealth seemingly means less discretionary spending. It's probably too soon to tell whether the growth of DC schemes will change that.

Regulators seemed to misstep in supervising financial institutions involved in the US sub-prime mortgage debacle. Should pension funds be included in general supervisory regulation or should specialist supervisors look after them? The answer isn't simple. more

The received wisdom is that a gradual retirement is better for you than a sudden one. Happiness studies in the US don't support that. What seems to matter is whether retirement is elected or forced, for whatever reason. more

Australia is one of only two developed countries with both income and asset tests that reduce the Tier 1 pension (the US is the other). These constrain pensioners' decisions to trade-down the family home after retirement. Market distortions follow. more

There is lots of money in pre-funded pension arrangements of all kinds. The OECD says the 2006 total was USD25.2 trillion. Sovereign funds add another USD4.1 trillion. more

??Retirement" means different things to different people. Sickness may be the real reason for stopping work. Different countries have different experiences on disability, driven largely by financial incentives - Europeans seem, in this context, to work more than Americans. more

Societies will change as a result of ageing and not just because of their changing financial status. This fourth look at a recent UN publication suggests that countries prepare their personal support, social and political institutions for significant shifts. more

Countries wanting to improve workforce participation rates of older citizens might learn from Japan. Financial incentives, linking prospective employees with employers and increasing the proportion of self-employed seem to matter. Cultural issues also seem important. more

Encouraging older workers to delay 'retirement' by changing jobs represents a realistic answer to the costs of ageing populations at both a macro and a household level. But what kinds of jobs might be available? Will older workers be happy to change? Apparently. more

Comparing income and wealth in retirement between the US and six other rich countries identifies some issues that the US needs to deal with. A new international data source (the LWS) allows an initial look at a seven country comparison. more

It's natural that government agencies find support for their government's own retirement income strategies. Here's one from Australia that suggests the compulsory Tier 2 savings scheme seems to be working. But all of the costs of compulsion need to be counted first. more

If you compel citizens to save for retirement then you might expect that everyone will be saving for retirement. Well, no; not once the data from 17 South American countries are analysed. Partly successful 'compulsory' regimes might actually do more harm than good.
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Workplace saving schemes are often creditors when the employer disappears. Should amounts owed to a scheme get priority over other creditors? The OECD thinks they should if the contributions were due but unpaid. Unfunded Defined Benefit commitments seem different.
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Another look at the UK's proposed reforms - this time from the perspective of the impact on saving decisions today of tomorrow's income-tested state benefits. The verdict? Complex and not well thought through. The likely outcome? Confusion and sub-optimal saving decisions (to either save or not). more

Canadian research confirms work in other countries about the "gendering of assets". Women tend to have less income, shorter working lives in less well-paid jobs and therefore have less wealth in retirement than men. They also live longer and that potentially compounds the issue. more

The United Nations marks the publication of its 60th World Economic and Social Survey by looking at the implications of ageing for social and economic development around the world. We look at one chapter. 80% of the world's elderly lack formal health, disability and income protection - that's 342 million people. It could be 1.2 billion by 2050. more

Efficient annuity markets should be part of any well-developed financial market. Annuities allow the old to reliably run down their retirement savings but they are surprisingly unpopular. Only the state can provide the good data essential in this area. more

Baby boomers say they want "phased retirement" - a gradual reduction of work hours in the transition to full retirement. There are some structural issues to address but history has shown that baby boomers tend to get what they want. It might suit employers too. more

Why do workers give up the possibility of being paid to save for retirement? It seems irrational not to receive the employer's subsidy and the usually significant tax breaks given to retirement saving. Evidence from the US and the UK gives some insights. more

The radical extensions to KiwiSaver by the New Zealand government's 2007 Budget on the eve of its 1 July 2007 start date have raised the issue of whether governments really can change behaviour to increase either total individual or national saving. This carefully worded officials' commentary implies not, or not much. more

When government's procrastinate on difficult decisions, the uncertainty costs actors because it affects consumption, saving and investment decisions. It's possible to estimate the impact of indecision with respect to the state's involvement in pensions. It reduces welfare. more

A report gives a comprehensive description of the five Nordic countries' social protection arrangements of all kinds. Chapter 7 (separately downloadable) analyses the age pensions and their derivatives, disability and survivor benefits. For Nordic taxpayers, they are not inexpensive. more

A "National Retirement Risk Index" (NRRI) measures the financial readiness of US citizens for retirement. The 'at risk' population, according to the NRRI, grew from 31% to 43% between 1983 and 2004 and is now 44%. Should US policymakers be worried about this? more

For the last 20 years, New Zealand has had a two-pillar retirement income system - an elegant, universal, PAYG state pension plus voluntary saving. There have been no tax incentives or compulsion for the second pillar of private provision. So, how have New Zealanders responded? Apparently, mostly quite rationally. So what's the problem? more

If a country wanted to change the way it ran pensions, or other policies that affect the retirement of its citizens, it would be advised to test changes against the OECD's Guiding Principles for Regulatory Quality and Performance. Doing that before, rather than after the change would also be good. more

House prices and debt have increased rapidly in many countries, alarmingly so to some. This matters to households where the home represents usually the most significant asset, debt and saving project. Should we (and the framers of public policy) be worried? Possibly not. more

World-wide, the distribution of wealth is more heavily concentrated than income. A "purchasing power parity" approach would reduce differences but perhaps official exchange rates better reflect personal and capital mobility. There are significant issues with data. more

Employers seem to expect baby boomers to want to work longer to make up for an apparent lack of financial preparedness in retirement saving. Greater uncertainty in expected outcomes from saving plans creates risks for both employers and employees. more

'Poverty' in richer countries is usually a relative concept and there are three main ways of measuring it - by income, by consumption and directly, by living standards. On the first two measures, the position of Canadian older people has improved markedly over the last 35 years. more

The things that seem to be linked to increased saving include higher output growth, "fiscal consolidation" and better terms of trade. Private credit increases and ageing populations tend to reduce saving. Increased credit may mean firms invest more while a higher cost of capital seems associated with lower investment. more

Germany provided the model for many, mainly European countries' pension arrangements. The ageing population and falling birth rates have undermined that model. Substantial changes between 1992 and 2004 will probably continue. more

The UK proposes adding a third auto-enrolment, DC layer to the existing two-tiered state pensions. Employees can opt out; employers must subsidise member contributions. But should the government be requiring this kind of thing? Probably not - at least, not without more evidence. more

Throughout the developed world, the greatest share of retirees' owned assets (outside pensions) comprises residential real estate. In the US, they could annuitise some of that but overwhelmingly, when they 'equity release' they choose a line of credit approach. more

Here is an alternative view on the possible effect that ageing populations might have on global asset prices. Demography matters to this view and so the life-cycle model could see profound effects that may be amplified by moves to more pre-funding as "older" countries reduce PAYG benefits. more

The spread of DC 401(k) retirement saving schemes in the US is often attributed, in part, to increased labour mobility. Apparently not - the more likely explanation is that the increase in 401(k) coverage was the cause rather than the effect. more

Strongly negative household 'saving' might tell us something about the behaviour of New Zealanders but not whether they are saving for retirement, let alone saving enough. A 'stocks' measure of wealth is much more useful than the 'flows' of income and spending. more

Saving plans designed to reflect the principles of behavioural economic principles will 'improve' outcomes - raise joining and saving rates and increase benefits. However employers and taxpayers might wonder whether these 'improvements' are all good. more

Japan's reaction to demographic change is interesting because many countries will soon face the same challenges that Japan faces now. Incremental withdrawal of the state seems more likely than needed transformation. more

PAYGO pensions are seemingly partly responsible for falling birth rates as adults no longer need children to look after them in retirement. The solution? Give citizens a choice between the status quo pension and one based on the contributions of the children (less an amount to fund the others' pensions). more

New Zealand's KiwiSaver is the world's first national, auto-enrolment, retirement savings scheme (starting 2007). The UK also proposes such a scheme - similar but different. Which is likely to be more successful? Does either country need one at all? more

There are many ways that policymakers can influence behaviour. Ageing populations mean they should be looking at different levers to manage risks. Whether they should do anything beyond looking needs more work. more

Europe's pension crisis is a demographic one and there is a 'remedy': force those responsible for the crisis (those without children) to pre-fund their own pensions while continuing to pay taxes to support current pensioners.
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Previous research has tended to understate the effect of defined benefit pension wealth (state and private) on other wealth. This US study suggests a way of correcting biases. Whether we need to worry is another issue. more

The financial markets of countries seem to reflect, in aggregate, the life cycle needs of populations. The countries are individuals writ large. A 72-country analysis evidences the expected. more

Annuities have a potentially important role to play in a retiree's investment portfolio. US evidence suggests that the retiree should choose when to annuitise. Taxpayers may not concur. more

With investment choice in Singapore's Central Provident Fund, there is now interest in how members behave. Not as well as they should be, apparently. Time for the government to do something about that. more

The Independent Evaluation Group - World Bank looks at two decades of its involvement in pension reform. The IEG's report criticises the Bank for paying scant attention to noncontributory options for pension reform. more

US workers seem to be irrational. About a third give up the extra pay that comprises retirement saving subsidies from their employers. About half of those potential contributions are "lost". What to do? more

Reductions in European state pensions in the 1990s seem not to have increased saving rates. There are several possible explanations - irrational citizens need not be one of them. more

The World Bank's Averting the Old Age Crisis notes that "myths abound in discussions of old age security". Ten such myths are demolished in a 1999 'must read'. more

Population ageing need not equal public pension crisis. In a growing economy, workers can enjoy higher net real wages and support increasing numbers of pensioners. How come? more

There is no substitute for looking at stocks of wealth (rather than flows of "saving") to assess the adequacy of retirement saving. This US study re-proves that eloquently. more

Tax incentives for private provision are as much part of public pension costs as the amounts directly paid to the retired. Counting the costs of incentives might raise awkward questions. more

Chile and other Latin American countries give us lessons about what (and what not) to do; what (and what not) to expect. Intricately detailed regulation is inevitable - "success" isn't obvious. more

Norway apparently needs pension reforms and this paper looks at some of the possibilities. There are other issues that might be added to the agenda. more

The living arrangements of the elderly in Portugal seem to be changing rapidly since 1994. That has both social and welfare consequences. more

Whether more savings means economic growth seems related to the type of country. Greater savings might matter for poor but not for rich countries. more

The UK's pension arrangements are complex and seem not to be working. The latest proposals? Let's make them more complicated more

Conspiracy theories apparently explain the push to privatisation. The actual reasons are probably more mundane
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In Canada, the impact of the way in which taxes and benefits are indexed is larger than delaying the entitlement age to 70. Perhaps the benefit design needs fixing. more

Five different data sources show that private pension coverage in the US is about 50% of workers and has been that way for at least 15 years more

The World Bank's 1994 book, "Averting the Crisis" started the pensions debate in many countries and has provided a template for change. An e-version is now available to download more

Since 2001 every Mexico City resident over 70 has received free medical care and a monthly pension. The governor responsible for this programme ran for President and promised to extend the programme to all Mexicans. more

The World Bank's pension specialists have re-visited the Bank's 1994 "three pillar" model and come up with five pillars. There are some obvious and curious gaps more

The UK's new Personal Accounts will have a big impact on workplace retirement saving arrangements. The numbers of members will increase but, over time, total contributions could actually come down. That depends on how employers react. more

Taxes are usually a 'this year' calculation; that's how we pay the state. Pensions are rather different - age, employment history - sometimes residence, contributions all matter when the state pays us. What implications does this dichotomy have for the tax treatment of pension savings? more

The European Commission reports on the economic impact of ageing populations over the next 50 years - low birth rates, longer lives mean higher pension costs. There could be another 59 million immigrants but the median age will still increase from 40 to 48. The news is not new; the recommendations unsurprising. more

Annuities help retirees to reliably run down savings with some confidence that income will continue until death. But in the US they aren't very popular. Perhaps it might help if 401(k) retirees were forced into a partial annuity. Perhaps not. more

In Vietnam, poverty levels among the old are similar to the population as a whole - about one in five. Having an old person in the household is less significant than being in an ethnic minority or having children. Public transfers go disproportionately to the 'unpoor'. more

Should regulators limit the amount pension schemes invest in hedge funds? First they need to find out how much money is in hedge funds and that's not easy. Whether pension schemes should have any money in hedge funds is another issue. more

Half of US workers seemingly aren't saving for retirement so the government must intervene. Lessons can be learned from other countries. There has to be a "low cost system" and workers must start saving as soon as they start working. The evidence for intervening seems sparse. more

Compulsory Tier 2 schemes need lots of rules, especially if the scheme partly replaces the state's pension obligations. Defined Contribution Tier 2 schemes face an additional hazard - the investment risk. The OECD wonders whether more rules might be necessary. more

Perhaps behavioural economics has got the retirement saving issue wrong. In the US, savers seem to be 'irrationally prudent', rather than 'irrationally spendthrift'. That may mean they are saving too much, rather than too little. Perhaps, citizens don't need the 'protection' provided by behavioural economics-based policies. more

The World Bank's From Red to Gray looks at the implications of Eastern Europe's rapid ageing. Chapter 3 looks at the impact of demographic change on savings and financial markets. In short, Eastern Europe probably faces a different future because of its past. more

In Italy, it seems that the previously falling birth rate was caused by high pensions. Now, those who have lower expected pensions have higher fertility. Children seem to be seen again as "old-age security" for those who can't save 'enough'. Is this causation or correlation? more

Most savers for retirement choose (or are required to use) pooled saving products. Legalistic disclosure regimes impose real barriers to understanding, especially on fees. A six-country review shows they are rarely clear, mostly complex and often misleading. Pity the poor saver. more

The US is endlessly fascinated about when its Social Security system for Tier 2 pensions will run out of money. The government now says it will happen in 2049. One of the problems with these numbers is that they won't happen. Social Security 'contributions' are just another tax. Tax changes; benefits change. more

The restructuring of state-owned enterprises in China in the late 1990s saw sharp declines in the employment of urban residents. Early retirement and the exit of older workers (mainly women) were the main contributors. Generous early retirement pensions encouraged the downsizing. It seems they might now be returning. more

In Latin America, where Tier 2 DC schemes are supposedly taking the retirement saving risks private, governments don't let members make the investment decisions. What will probably be one of the saver's largest assets can't reflect their preferences. more

Over the last 25 years, the focus of US retirement saving has shifted from Defined Benefit to Defined Contribution schemes. Before the global economic crisis, total pension wealth (including Social Security) was projected to double over 40 years and the increase will affect DC schemes most. more

A cross-country comparison of the health status and expectancies of older Europeans showed more variation in health than mortality. A healthy old age should be desirable in itself but becomes an important objective if we want older people to work longer. more

Poorer people in the US may behave in the same idiosyncratic way as richer. The trouble is that the poorer have less room to move. Their 'mistakes' seem to matter more so 'aggressive' marketing tactics may do them greater harm. What might this mean for public policy? more

US savers who can choose their investment strategy in their 401(k) plans seemingly make some serious mistakes that cost them real money. A study of nearly 3 million accounts puts the cost (lost returns) at between 0.6% and 3.5% a year. But that was before the 2008/09 meltdown. more

An unusual circumstance allowed a Tanzanian experiment on the impact of a low level, income-tested pension in an HIV and AIDS-affected community. The value of the difference the small regular amount made to the recipients seemed to significantly exceed its cost. more

Recent pension reforms in Austria have reduced benefits so that by 2050, pensions will cost 'only' 12.2% of GDP. Modelling suggests that Austria's GDP will be boosted both by encouraging the older to work longer and by reducing the tax burden - but not by enough. more

In theory, people decide rationally how much to save based on individual trade-offs between immediate and deferred consumption. However, the way the decision is presented ("framing") seems to affect the decisions of US savers. Perhaps so. more

A 'fallacy of composition' says that what's good for one person isn't necessary good for a group. So it is with saving: that's because $1,000 saved is $1,000 not spent. Saving might raise the saver's wealth but not necessarily the country's. Spending may be more important than saving. more

World share markets lost $US30 trillion in a year - that's about half their value. Savers around the world have been punished heavily. How did it start? US housing, mortgage finance, rating agencies along with poor regulation and information all share the blame. Lessons must be learned. more

If governments regulate pension providers, telling them about their responsibilities and how they might implement those more effectively seems sensible. So it turns out - but an international study shows not many regulators are required to educate providers. more

In the US, the rules governing pre-funding levels in Defined Benefit schemes changed in 2006. After the events of 2008, surpluses may not be the issue they once were but, given the tougher rules, is the tax treatment of 'reversions' to employers fair? Probably not. more

A 2007 survey of the sponsors of US Defined Benefit pension plans showed that one third had closed or frozen plans in the previous two years. Another one third proposed the same in the coming two years. Employee benefit strategy and new rules are driving the changes. more

When governments try to 'improve' retirement savings behaviour, they are often unsuccessful. New Zealand's KiwiSaver may re-prove that but will also increase inequality while acting against other government policies. New Zealanders should be unhappy about that. more

Actuarial adjustments to the US Social Security pension for early and later payment are supposed to be financially neutral. Seemingly, they do not allow for individuals' preferences so people work less than they might have and tend not to "partially retire". more

The US has seen a large shift of retirement saving provision from Defined Benefit to Defined Contribution over the last 25 years. Projections show there will be very large amounts in DC plans by 2040. more

Everyone who saves for retirement through a financial product or by direct investment in shares, bonds or bank deposits participates in international money markets. The number of savers and the amount of money involved have mushroomed. That seemingly contributes to volatility. more

Tax incentives encourage people to save for retirement, don't they? They may not actually do that but that's not their only problem. Most tax benefits go to richer savers, rewarding them for what they may have done anyway. What should the US do about that? more

In the US, Tier 3 401(k) schemes (and their equivalents) usually offer lots of investment choices - too many say some. Amongst all those choices, schemes seem typically to offer 'efficient' options when compared with conventional performance benchmark indices. more

In the US, the proportion of retired home-owners and the proportion of housing equity in overall wealth have been relatively static over 20-30 years. Housing equity can be released post retirement but retirement-specific wealth is likely to become more important over coming decades. more

Southern Africa has a cluster of three countries with non-contributory pensions. The historical reasons for their development vary but the reasons for their continued existence now seem similar. more

Social security pensions apparently have adverse effects on net marriage rates, total fertility rates, private savings, some schooling attainment measures and per capital growth. So says a model applied to 32 year, 57 country data. more

Surprisingly little attention is paid to the small number of 'universal, non-means-tested' pension systems in the world, despite their attractive features. The pensions world seems focussed on forcing citizens to save. Addressing old-age poverty might be more useful, even for poor countries (but not just them). more

Shareholders (and others) need to know the expected cost of Defined Benefit pensions that managers promise former employees. Past rules had unintended consequences. Is the proposed IAS19 any better? Probably not. more

The trustees of UK pension schemes pay high fees to fund managers to, among other things, beat the market. By hiring managers to pick which markets to be in, they want higher returns from the professionals. Do they get better returns? Perhaps - or perhaps not. more

Private medical insurance for the US retired costs a lot. Without employer-paid cover, retirees don't have many choices. If they save for the post-retirement costs, the amount looks discouraging. Cutting cover or relying on the state seem the only other options. more

The macro-economic numbers appear to show New Zealand's household saving has plummeted since 2000. Are the numbers wrong or are households getting poorer at an alarming rate? Statistics may not give the full picture - missing information doesn't help. more

Longitudinal studies track the behaviour of individuals over periods of time. They show how people respond to change and how they might integrate private behaviour with public policy. It's comforting to see that US citizens seem to behave as the supporters of the "rational expectations" hypothesis might have guessed. more

Universal pensions are a good idea - for a country. But what about for the world? Because we live in a world where business is "globalised", what's wrong with adopting the same approach for a "worldwide old-age pension"? Quite a lot actually, especially if someone else has to pay for it. more

Governments, insurance companies and Defined Benefit private plans all provide annuities that depend on one or, sometimes, two lives. US providers are probably underestimating the mortality risk. And then there is the investment risk. more

In a retirement saving scheme, who should bear the inflation, investment and ultimate mortality risks? In a pure Defined Contribution environment, it's the saver. In the Netherlands, employers, taxpayers and other savers pitch in as well through "hybrid pension plans". The, perhaps, unintended consequence of regulation? more

US workers don't see the changes that are coming; are failing to act constructively; expect benefits they don't have; won't act on investment advice; don't have much financial savings outside DB plans and don't understand Social Security. Nothing too surprising in any of that. more

The Danish pension system combines a modest universal, Tier 1 pension and "near universal" Tier 3 Defined Contribution deferred and immediate annuities. Tier 3 is distinctively Danish and apparently enjoys wide, necessary support. But it is complex. more

How do US citizens respond to signals embedded in the system of financial support for nursing home care? Quite rationally actually, though some might call it a "reflection of the moral hazard due to the existence of social insurance." more

The shape of state-provided pensions affects people's behaviour at the work/retirement transition. Often the law of unintended consequences applies. US evidence indicates the truth of both these influences as the rules have changed. more

If more older people worked, countries might produce more, improve the economies' capacity and reduce the costs of ageing populations. Older people and other taxpayers might be happier as a result. Australia is starting to wonder about participation rates at all ages. more

Changes to the way retirement incomes are financed should be based on good evidence that is subjected to robust investigation over time. New Zealand missed those steps with its new KiwiSaver scheme, justifying its existence on seemingly dubious economic analysis. more

Taxpayers ought to worry about the future cost of the Defined Benefit pension promises made to civil servants, but not for reasons given in this report on pensions promises of the German Federal State of Hesse. more

If the UK's system of Personal Accounts starts as planned in 2012, some people shouldn't join because, strangely, they will be worse off by saving. Here is a suggested solution to that problem. more

The OECD reviews a decade of China's pension reforms. The authors report no progress: the goal of expanded coverage remains as elusive as ever. It seems that, even in China, citizens can't be made to join the 'compulsory' system. more

People (and some nations) save for retirement because citizens stop working on account of age. Lots of money will be needed for baby boomers' retirements (too much, say some). But what if we abolished retirement? A lot of people want to work until they drop. Why not let public policy encourage that? more

Diversification, argue investment professionals, reduces risk. That is the received wisdom - here is some proof. Looking back over nearly 80 years, savers in eight countries would have been better off investing 100% in other countries' investments, not their own. more

New Zealand's taxpayers will be spending a lot of public money on new retirement income saving initiatives after nearly 20 years of spending none. Was this decision based on sound analysis of data on New Zealanders' savings behaviour? Is this policy shift likely to meet any of the stated objectives? Probably not. more

China reformed its pension system to pre-funded individual accounts in 1998, but faces a problem of 'empty' accounts because the funds have been used to finance social expenditure of local governments. A high-level international research team recommended in 2005 that the country transform these 'empty' accounts into 'notional' accounts. more

Defined Contribution plans often leave the investment decision (and the investment risk) to members. Unfortunately, members often don't know what they are doing. Designing investment options carefully can help. more

Some suggest that demographic change is exerting a positive impact on saving rates in developed countries. Apparently not - the effect seems now negative and inexorable (but not necessarily disruptive). There are other explanations for the 'savings glut'. more

Annuity markets - particularly voluntary annuity markets - tend to be small, expensive and under-developed. As a result, they seem to play a smaller than ideal role in retirees' portfolios. Time for public policy to take a lead? Probably. more

The UN suggests that the economic consequences of ageing are far from difficult. Most developed countries will probably be OK on current growth trajectories. Immigration probably won't help; improving workforce participation and productivity will. Increased savings might raise risks. more

US analysis shows that variable annuities seem better suited to retirement investment needs than fixed annuities. And gradual annuitisation from retirement until age 80 seems better than 100% annuitisation at retirement. That's what the model says - real life might be more difficult. more

Governments that get involved in guaranteeing retirement benefits of failed private schemes or the bankruptcy of sponsoring employers need to take care. Political, rather than market-based motives raise gaming opportunities. more

Countries angst over their citizens' saving behaviour (typically awful). Public policy decisions seem to hinge on inadequate data. Aggregate saving measures in the US seem particularly unhelpful. Most of the downward trend seems attributable to changes in the saving rates of those over 65. Why might we be concerned about them? more

Employer-sponsors of Defined Benefit plans (and their advisers) worry about the economic risks of improved mortality. Better data and improved projection techniques might not comfort them. A better understanding of the issues would help policymakers. more

Spain introduced tax incentives for retirement saving in 1988. Contemporary data show how they affected consumption behaviour. New saving is at best less than a quarter of money contributed. There are some differences in the impact on consumption at different ages. The oldest show most signs of rearranging existing savings. more

Private medical insurance is a big deal in the US. Being employed at older ages may be as much about access to this cover as about pay. Continued access during early retirement to private insurance may be declining, adding worries to those raised by declines in public and private retirement incomes. more

Wealth at and in retirement is the only thing that really matters to a household's economic welfare in retirement. That can be measured only at the household level. So, what can we tell from aggregate, so-called "household saving" numbers? Not a lot. In fact they tend to distract rather than illuminate. more

The "National Retirement Risk Index" (NRRI) measures the financial readiness of US citizens for retirement. This third look at the NRRI data seems to show that the future retirement income position of the bottom third of households worsened over the period 1983-2004 and might worsen again. more

The EU's future pension numbers are compared and analysed. Risks to the outcomes are modelled. Pension costs will increase but not to the same extent that the increasing numbers of pensioners might have suggested. Whether EU countries can hold the line on costs is another, political, issue. more

Formally defining "actuarial fairness" and "actuarial neutrality" in the context of state pension systems may be useful (to understand how individuals may be affected) but probably doesn't help much. Both concepts derive from design elements that perhaps should not define entitlements to state benefits. more

The world of Tier 2 retirement saving schemes is changing as this two-country comparison illustrates. Employers are reacting naturally and possibly in their best long-term interests. Sometimes commercial and community interests diverge. more

In Australia's compulsory Tier 2 environment with an income/asset tested age Tier 1 pension, what is the role of Tier 3? Overall, apart from saving through housing, not very much. Financial assets, including superannuation, increased over a six year period by the same amount as debt. more

Many New Zealand households have family trusts. These usually have a tax planning or asset-protection rationale. Given that the outcome will usually mean that the government pays more or receives less - and that individuals own and earn less - we need to know more about them. more

Australia's retirement income environment is complex during both the accumulation and retirement phases. Complexity necessarily accompanies compulsory private saving and there are gaps that seemingly need fixing. Whether it is 'successful' has a number of possible answers. more

Governments are under pressure to cut ageing costs must hope that the labour market offers older workers work to offset reductions in state programmes. A US experiment suggests that older applicants find it more difficult than younger to get a job offer. more

Turkey offers lessons in how not to reform pensions, how not to face up fully to necessary change and how long it might take to look like fixing things. Recent changes are not enough and not just from the viewpoint of the cost of unaffordable past promises. more

So does pre-funding government pension systems increase national saving? That depends on who's in charge of the money and how it's run. The case for private pre-funding to increase national saving seems lost because of the substitutionary effect. more

In the pantheon of PensionReforms' universe, China is the big one. Its size eclipses all others - its pension problems are no smaller and are likely to worsen. Recent moves to partially 'privatise' pensions seem headed down the wrong track. There are other, simpler, more appropriate ways of addressing the issues. more

In 1983, the US government increased the State Pension Age by two months a year (from age 65 to 67 over 24 years), affecting employees born after 1938. Actual retirement ages seem to be affected by about one month in each two months the State Pension Age is higher. more

US baby boomers say they want to retire later. The things that flag later retirement ages include self-employment, education and earnings. DB pensions, employer-sponsored retiree health benefits and wealth point to earlier retirements. Might the 'crisis' fix itself? more

What to do about public policy on pensions if formal property rights don't really exist? The usual prescriptions shouldn't apply so building on traditional ways of looking after the old is at least part of the answer. Fixing the legal system should also be part of the solution and not just for retirement incomes. more

After retirement, asset holdings of the retired change in largely expected ways. It's nice to know that and also that there is room for more, better information, given the future size of this part of our populations. more

An analysis in 2000 of 30 years' data from 150 countries shows what seems to really matter if improving savings is a national objective. Growth seems important but private reactions are slow to appear. Faith in the good sense of citizens also probably matters. more

"Notional Defined Contribution" arrangements are replacing and supplementing existing state schemes - here are some of NDC's strengths and weaknesses. However, NDC schemes do not clearly identify why the state is in the pensions business. more

Australians have taken their first detailed look at household wealth in 90 years. Apparently they are doing quite well but much of their wealth is illiquid (housing etc). We need to know more about the ways their assets change over time. more

Any positive impact on gross national saving that might be attributable specifically to increased pension saving is low. Reforming countries do not seem to have attained higher saving rates than others. Perhaps we should stop worrying. more

This 20 year review of Chile's pension arrangements identifies its achievements and quantifies its contribution to key economic indicators. However, looking at the past doesn't mean it should be the future. more

The UK government's own employees would cost a lot more than their salaries if pension promises were properly accounted for. A look at the cost of those promises produces some alarming numbers. more

US social insurance is, in substance, both economically sensible and socially and politically acceptable. That's why it has resisted recent change but that shouldn't make it unchangeable. more

The US age discrimination laws (ADEA) seem to be having perverse effects - increasingly protecting, at significant cost, the jobs of older, white, male middle managers. The 'Law of Unintended Consequences' again. more

The SSA in the US has released its latest analysis of the over-65s' incomes. Social Security provides at least half their income - the median total pre-tax, pre-Medicare income is $US20,481. more

Martin Feldstein offers a sweeping review of current US 'social insurance' and 'welfare' programmes and suggests a political and economic basis for reform. Definitional issues limit the possibilities. more

The housing habits of US 'early' baby boomers and current younger retirees are analysed and compared. There are differences but the similarities are more striking. No particular need to worry about either. more

If public pensions should, in part, prevent poverty amongst the elderly, a major review of the EU25 countries shows a fairly dismal picture. This, despite the huge cost and hugely complex public pension arrangements. more

Privatising Tier 1 in Chile carried large, long-tail transition costs as this 1998 paper amply illustrates. That's not the only problem with a compulsory Tier 2. The advantages are less obvious. more

A largish sample of English pre-retirees seems to have saving for retirement income under control. It's a pity that recent major reports, intended to inform the UK's debate on pensions reform, didn't seem to notice that. more

This 1999 paper looks at some of the shortcomings of recent pension reforms, particularly in less developed countries. Increased complexity seems the inevitable next step. more

The Jonahs tell you that if pensions don't get you, age-related health care costs surely will. Information from New Zealand raises questions about the health component of this received wisdom. more

Bolivia is the only country in the Americas that provides its citizens with a universal age pension. Antigua and Barbuda will be the second if a new government keeps its promise. more

Annuities matter for ageing baby boomers who should want to run down their retirement saving assets in an orderly way. They should also matter for governments. This article looks at the UK annuities market. more

Behavioural economics tells us that US savers tend to be irrational with their saving and investment choices. They might be but the hugely complex rules don't help. more

In a seminal 1992 paper, Alicia Munnell argued for the removal of tax breaks for retirement saving in the US. The logic still stands and things have got worse since. more

The UK's Pensions Policy Institute suggests that the UK government has not looked at all the options for pensions reform. If that's so, any changes probably won't last. more

Some relatively positive news from the US for citizens' contemplating an increasing pension age. It's not all doom and gloom. more

Not many countries regularly count the cost of tax incentives for retirement saving. The OECD sheds some light on this complex task but doesn't get to some obvious questions more

US evidence shows that a shift from defined benefit to defined contribution plans increases the variance in asset holdings. There are potential lessons for those who propose reducing risk-sharing in traditional social security programmes more

US citizens in their peak saving period seem, perhaps, to have their retirement saving project at least partly under control. However, asking people what they think doesn't always give you what you need to know
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The OECD published, as a supplement to its biannual publication "Financial Market Trends", a 111-page report that examines the governance of private pension funds and abuse of tax deferrals. more

The Trustees of the US Social Security pension system have issued their annual Report on its financial outlook, which is little changed from last year.
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Bonn's IWG proposes a PAYG citizen's pension to replace Germany's complex, unsustainable, earnings-related scheme. A shaft of light in a murky debate more

New Zealand's Savings Product Working Group thinks the government should force NZrs to decide whether to save for retirement - the trouble is with the lack of evidence more

'Equity release' financial products let the retiree-owners of assets draw down on them without having to sell. An Australian government report looks at the main types and issues some warnings. Bad decisions can be permanent and financially disastrous. more

The workforce is ageing in different ways. A New Zealand study shows the age and gender shapes of 37 occupations. Women tend to dominate the professions at younger (but not older) ages. Some occupations are dominated by younger workers. Employers will need to be smarter. more

A 2007 survey of older New Zealanders (aged 65-84) showed that 88% feel satisfied with their lives. Health, income, partner status and home ownership seem the top four indicators. Much is as might be expected. more

When countries get richer, fertility rates generally decline. But when countries get really rich, fertility rates seem mostly to rise off their lows. So, are predictions of demographic doom alarmist? more

The OECD has looked at countries' complex rules governing funding requirements in Defined Benefit schemes. There is no easy overall solution and so perhaps it's all too hard. Anyway, employers probably need to stop the DB schemes they have. more

Europe has a big problem - too many old people live in poverty because their countries seem to be failing them. So, should Europe solve the problem rather than leave it to each country? There are some advantages but also quite a few problems; probably too many problems. more

Changing the State Pension Age should provoke a review of other age-based aspects of social welfare. In the US, Social Security pensions can be claimed from age 62. As the State Pension Age rises to 67, should age 62 become 64? The answer isn't simple. more

The UK government has published a report describing proposals to reform "care and support systems for adults". Buying "insurance" from the government at retirement to secure aged care services is one option. Consultation now follows before the government decides what it wants. more

Austrian workers enjoy a generous (and expensive) Defined Benefit pension scheme. Tier 3 saving schemes are of lesser value, seemingly because of their 'riskier' Defined Contribution format. More employer/state support is apparently needed. more

Australia has looked at its retirement income system. Three "pillars", supported by tax breaks are good but can be "improved". The State Pension Age should go to 67 and the means test simplified. Australians need more, better information to help them make saving decisions. more

The OECD thinks that pension assets had fallen by about $US5.4 trillion (20%) by the end of 2008. It looks at how countries have reacted to this. Some changes are a good idea anyway but pension assets seem somehow special. Besides which, there is the other $21.6 trillion. more

The World Bank's From Red to Gray looks at Eastern Europe's rapid ageing. Chapter 2 is about the impact of demographic change on labour markets. In short, labour participation rates are generally too low, mainly from the early exit of older workers - not good news for them or for pensioners. more

International comparisons of pensions - public or private - are fraught with difficulties. The OECD has published a first Pensions at a Glance for the Asia/Pacific region. Necessary constraints in the comparison affect the robustness of the results. more

In Australia, financial incentives encourage men's early retirement but not so much women's. For them, health and family seem more important influences. The financial incentives strengthen after State Pension Age. Shifting that now might not be effective. more

The private Defined Benefit scheme is a threatened species. The global economic meltdown will not have improved its survival. In the UK, a more immediate threat is the 2012 arrival of Personal Accounts. DB schemes will change but how? more

The World Bank has studied the implications of Eastern Europe's rapid ageing. Each chapter of the book is separately downloadable and will be separately reviewed. Chapter 1 examines the demographics - later chapters cover labour markets, savings, pensions, healthcare and education. more

In former times, having more children usually meant increased financial security in old age. That still seems to apply in less developed countries. Better pension systems and more developed capital markets have seemingly undermined this relationship in developed countries. But is this simply correlation rather than causation? more

It seems that too many Canadians are under-saving for retirement despite significant government involvement at Tiers 1, 2 and 3. The proposed answer is a "Canada Supplementary Pension Plan" modelled on the UK's "Personal Accounts". more

"Social investing" sounds like a good idea - that is, until we have to know precisely what it means. Even if we can know that, is it always a 'good thing'? Not necessarily. Should matters be left to governments rather than trustees? Yes, certainly in the US. more

Here is what US 401(k) plans looked like in 2006, before the global economic meltdown. The median balance was $US66,650, about two-thirds of which was in shares (unchanged for about 11 years). The last two years' events will have changed everything. more

Behavioural economics seems to offer guidance leading only to winners without losers but the mistakes of proxy decision-makers replace those of decision-makers. The further proxies are from the decisions, the larger those mistakes are likely to be. more

How well are US households saving for retirement? Mostly well enough according to a report that uses lifetime (rather than current) incomes as the measure. Only 25% of households (at the bottom end) are saving less than a model predicts they should. more

Samoa's existing social security arrangements are reviewed in detail by the International Labour Organisation. A "sourcebook" gives data on all aspects of what happens now and policy options based on the 'gaps' identified. The universal Tier 1 pension gets a tick. more

In the US, younger and older consumers make mistakes about the use of financial services that mean they end up paying more than they need to. Financial sophistication tends to improve to middle age and then decline. more

Sri Lanka can afford a universal pension despite its relative poverty and undeveloped financial framework. The State Pension Age and annual pension are the key variables. The same logic applies to rich and poor countries alike. more

Behavioural economics may help to explain why people behave as they do. It may also help employers and suppliers frame employees'/consumers' choices. Moving choice into the framing of public policy is another step. more

Studies of members' investment decisions in Defined Contribution schemes show the impact of the way options are framed. In Australia (with a compulsory Tier 2 environment), younger members tend to respond as expected. Older members seemed prepared to take greater risks. more

Japan used to be a poster child for household thrift though perhaps not for the uses to which its savings have been put. The household saving rate will soon be negative, driven by ageing. PAYG state pensions are also contributing to that downward pressure. more

In theory, the equity in the family home offers financial security that can be converted to cash if needed. In the US, it seems that older workers will not want to use the equity for living costs but rather as insurance or for a bequest. more

The US faces a number of alternatives when it addresses Social Security reform. The right questions need to be asked and all the implications of change considered (including cost). Some suggested solutions won't change much and may be harmful. more

The casual observer might think Mexico was switching from a PAYG pension to a prefunded replacement. Not so. In fact, Mexico now has an elaborate money-go-round that means tomorrow's pensioners are still dependent on tomorrow's taxpayers. more

An international agency calls for a universal "social pension" - a non-contributory, universal Tier 1 pension from age 60. In poorer countries, that helps the old but also helps society, governance and need not cost a lot. more

In a country as large as China, pension experiments can be local - perhaps need to be local. Baoji City is trying a contributory, Tier 1 pension that, for the currently old, depends on the children's decision to contribute. Poverty alleviation is the scheme's modest target. more

Individuals need information to make 'sensible' decisions about retirement saving. Global, generic information (including 'financial literacy') seems less useful than help from specialist advisers. This has implications for disclosure requirements (and public information campaigns). more

Most retired Canadians seem happier in retirement than before and more (or at least as) satisfied with their financial position. Life satisfaction tended to fall with age but satisfaction with finances rose (compared with pre-retirement). There is no real substitute for asking. more

Surveys of US employers seem to show a mismatch - employers think that older employees will need to work longer (because they can't afford to retire) but the employers seem reluctant to keep older workers on. more

Australia has again looked at long-term fiscal issues associated with its ageing population. Things look a little better in 2007 than they did in 2002. more

In 2007, the Irish government issued a major report (a "Green Paper") that looked at most aspects of pension provision. Major change was seemingly unlikely, only minor but detailed tweaks. Not good enough, according to some academics. Root and branch change is needed. more

Anyone who has to understand the complex UK pension system (public and private) needs this Pensions Primer. The system is already complicated and over the next few years will become much more so. more

The Indian government has nearly doubled the number of Tier 1 social pensions it provides to the elderly poor. Paradoxically, this might increase the incidence of elderly poverty. more

Not many countries have a universal (Tier 1) pension. Mauritius (pop. 1.3 m; GDP per capita now $US5,500) started one in 1950 almost by accident when it was a lot poorer. It experimented twice with income tests but now everyone over 60 gets a pension. more

Very poor countries face few choices when it comes to pensions for the elderly. A universal, Tier 1 pension is the most effective way of delivering economic assistance to the old. The experience of Lesotho shows that Tier 1 can have social advantages as well. more

South Africa proposes to replace its existing pension arrangements with a universal Tier 1 pension and a dual, compulsory Tier 2 that is divided between a DB, PAYG arrangement and a DC, pre-funded scheme. The World Bank's thinking has had a significant influence. more

Much statistical information about Japanese pension plans, the elderly and other data that affect economic trends and analysis is drawn together in a single web site. more

Putting money aside against the possibility of periods of unemployment seems a sensible strategy. Canadian evidence shows that citizens, on average and on balance, are indeed sensible.
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This brief paper highlights a fundamental flaw in EU pension systems - the raw deal women get. The 'at risk of poverty' numbers are quite stark, particularly at the older ages. They may get a bit better as more women work longer and earn their own benefits. more

If citizens don't understand some basic financial concepts, they can't be expected to make sensible decisions about investment products, such as for retirement saving. The UK government is worried about the "financial capability" of its people; a gap that is partly of the government's own making. more

Australia forces its citizens to save for retirement, so they save more don't they? Perhaps but perhaps not; and anyway, seemingly not enough. Sterner measures are indicated. more

When the UK government decided that it wanted to control how citizens save for retirement through "personal accounts", it signed up to the rules that would be needed - such as the fees the state monopoly will let providers charge. more

In the US, poverty levels amongst older, unmarried women are high. Social Security family benefits - pensions for spouses, widows, divorcees - are useful, but leave many in poverty. Changes in benefit rules might help a little; but probably won't. more

Defined Contribution schemes with investment choice should let members tailor their investment strategy to their preferences and saving objectives. That's the theory. In practice, few US scheme members take an active interest and many of those act other than in their own best interests. more

This report aims to inform the US public about the 75 year financing options for Social Security. It assumes that Social Security stays in much its present form. Other options are possible. more

New Zealand now reviews its retirement income environment every three years. The 2007 Review, like reviews preceding it, found a lot right with what has happened (and is happening) but also raises some large question marks. more

Government interventions in the UK's retirement income system are complex and that looks set to worsen over coming years. Will that improve relatively high levels of pensioner poverty? Perhaps not. more

The wealth and income of older Americans changes a lot in retirement. Between ages 67-80, the income for about 40% declines, 40% increases and about 20% stays the same. How so? more

Do rich Canadians save more than others? The answer depends on how lifetime income is measured - using consumption of non-durables as an "instrument", it seems not, except in comparison with the poorest quintile (who simply do not save). more

Chileans face a complex decision whether or not to buy an annuity on retirement. New evidence identifies some of the decision's drivers. It also illustrates the complexities of state control when taxpayers may have to meet part of cost of retirees' decisions. more

The UN has summarised demographic data from around the world and sorts countries into three groups. The improving human condition raises future challenges as countries learn to cope with ageing populations. more

Aggregate and household saving numbers present commentators with a number of problems. Does the life-cycle hypothesis help us to understand them or can things be re-defined to make the model fit the facts? Perhaps a country's institutions also affect how saving is measured - and then there is the impact of PAYG state pensions. more

If citizens are to take greater responsibility for their retirement incomes, they need to understand the issues. In the US, there is widespread financial illiteracy and the US is not alone. Resolving that won't be easy but we should start somewhere. more

Many developed countries worry about the recent, steep increase in household debt. In the US, this seems to follow demographic influences, rising house prices and financial innovation. Should policymakers be concerned? Markets may have already begun the adjustment.
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Looking at just direct social expenditure by governments doesn't really tell the full story. Tax interventions (direct, indirect and concessions) should also be included. This report looks at 23 (of 30) OECD countries and tries to provide a more comprehensive total. more

The OECD has gathered together information from nine member countries (and a number of others) about the way different retirement saving arrangements work on the ground. It does not purport to deliver policy conclusions, and tends to take as a given that choice is costless and good. more

The UK's pension arrangements will become fairer, more complex, more expensive and will take decades to implement fully. The consensus view of local experts seems to be that the new system will be better but not good enough. more

Knowing how long pensioners might live is essential to the viability of private annuity markets. Commercial survival (of the annuity provider or even a Defined Benefit plan's sponsor) depends on managing the longevity risk. Perhaps governments have a role to play in promoting a "private market solution" - longevity-indexed bonds. more

This 13 country look at the rules governing the funding of occupational Defined Benefit pension plans makes recommendations for their future regulation. "Best practice" funding and actuarial costing methods are described. more

New Zealand has been worrying a lot about public policy on monetary and fiscal framework. Inflation really matters to long-term savers and New Zealand's Reserve Bank is currently struggling to maintain that within its target. This report suggests there is not too much wrong. more

This IMF working paper advocates a radical "new approach" to pension reform in China that consists essentially of abandoning the current old in order to focus on pre-funding old age pensions for all of today's young workers. Not good enough. more

This IMF working paper promises a primer on "public pension reform", but delivers less. It focuses largely on a proposal to add personal accounts to the US Tier 2 state-provided pension, known as "Social Security". more

The experience of rich countries in developing social assistance programmes has lessons for developing countries. It seems that the more comprehensive and universal the programmes are, the more likely they are to build cohesive countries with lower poverty and greater growth. Mind you, rich countries have messed up as well. more

Where retirement pensions depend on work history, women's entitlements tend to be 'derived rights' that follow the death of the former employee. Derived rights seem associated with pensioner poverty. Poverty rates are already on the rise amongst single older women - without change, there will be even more poor, older women. more

Financial planning for retirement in the US seems to be associated with higher wealth. Planning activity is strongly correlated with financial literacy and it seems that not much literacy (or planning) is needed to make a difference. Perhaps a role for employers rather than regulators? more

There is a new way of measuring Americans' financial preparedness for retirement - the National Retirement Risk Index. It seems to show a gradual disconnect between future retirees?? pre-retirement incomes and the amounts they will have to live on. Should we be worried? more

Without changes, average public debt in the EU region will grow from today's 63% of GDP to more than 200% of GDP by 2050. Most of that is pension-related but increases in health costs are not trivial. EU countries are divided into high, medium and low risk countries but the measurement basis raises questions. more

Rich countries tend to run Current Account Deficits (CADs). Some say that the countries are spending more than they earn; that it can't last and, perhaps, that retirement saving must become compulsory. Should the government worry about CADs? That's a simple question - the answer may be "perhaps not". more

'Redistribution of resources across age has always been centrally important throughout human history'. As the retired population demands a greater share of resources, that should not be at the expense of investment in children. Perhaps that should be protected. more

Worriers think that, as baby boomers retire and start running down their assets, prices of houses, shares and other property will fall. New evidence indicates that this may not happen. In fact, the reverse may be true because households seem to keep saving in retirement. more

Private, Defined Benefit, Tier 2 pensions are an important part of many countries' pension arrangements but sponsoring employers seem to be seeing more negatives than positives in their DB schemes. Perhaps the Law of Unintended Consequences is at work again. more

In 2000, the Reserve Bank of Australia didn't know whether Australia's compulsory Tier 2 had increased 'household saving'. This 2004 paper thinks the effect is now measurable (and positive). The question remains whether the costs justify the intervention. more

Increases in housing wealth seem to affect spending in the US more than increases in the value of financial assets. Housing wealth tends to be spent on non-durables while financial wealth tends to affect spending on durables. more

Public PAYGO pensions in Norway at both Tier 1 and Tier 2 are generous. Oil revenues have reduced the pressure for change. The 2005 reforms promise to reduce costs and improve labour incentives to work but will be more complicated. Private Tier 2 schemes are also now compulsory. more

In most developed countries, housing comprises a large share of households' wealth. People worry about how the recent run-up in prices affects consumption. US data is re-analysed - the long-run effect is to increase consumption by about 9 cents for each dollar of increase. Responses to price changes seem sluggish. more

The living standards of different types of households cannot be adequately measured without asking the people affected how they are managing and how they perceive their living conditions. That must be done in a systematic way. A new measure allows living standards to be compared across groups and over time. more

Many think that ageing populations will see reducing future returns from capital markets. But that ignores the implications of open world markets for labour and capital. Perhaps the life cycle model isn't the best explanation for what might happen. more

A comprehensive look at US data shows that retirement incomes may be less of a problem than retiree medical costs. Other patterns are more familiar (ageing changes) but perhaps more public attention should be directed at public programmes. more

Ageing populations present product design challenges for providers when they try to match customers' assets with income needs. We need to know more and to understand why some products aren't successful. Supra-national solutions may be indicated. more

The health and expected mortality of US citizens at about retirement age has improved markedly over 40 years to 2000. Do those, on their own, justify raising the eligibility age for the state pension? Possibly but more work is needed. more

While population growth is gradually levelling off, the shape of the global population will continue changing as the world ages in both developed and developing countries. This is not all bad news. more

Increases in housing wealth increase consumption by about 5 cents per dollar in Anglo-Saxon countries and 1 cent in Europe. That need not be a worry but should be allowed for in public policy settings. more

One way to transparently 'secure' the financing of a PAYG, pay-related state pension is to use a "buffer stock" of GDP indexed government bonds. However, why might a government want a pay-related scheme? more

The OECD has produced its annual snapshot of the pension asset position of its members (and selected others). Nearly all have more than in 2004. More pension assets seem, without explanation, to be better than fewer. more

A member of the UK's Pensions Commission summarises the reasons for its recommendations. They fall short of justification for a complex, long term replacement for an already complex system that doesn't work. more

The tax advantages conferred in the US on house loans and retirement saving vehicles tend to favour the latter. Reducing debt should therefore take second place but a third of eligible home-owners seem irrational. Or are they? more

Governments that want citizens' future pensions to depend, even in part, on market returns need to understand the risks they are taking on. Some Italian evidence may not comfort them. more

Recent pension reforms in the EU25 look as though they will worsen current levels of pensioner poverty. Fiscal considerations seem to have dominated reform - social issues have taken a back seat. more

The Dutch Tier 2 arrangements are analysed and recent financial trends observed. Industry-wide schemes are reducing benefits and employer-linked schemes are moving to DC. more

The UK's 1986 reforms that allowed 'Personal Pension Plans' to replace part of the state's Tier 2 seem not to affected other saving. Retirement and other savings seem unrelated. Perhaps. more

So far, older workers in the US have had lower 'displacement rates' than younger. But, as displacement seems related to job tenure rather than age, older workers could be more vulnerable in the future. more

There is no single answer to pensions reform - what really matters is effective government. This 'must read' suggests the best policy is what "accords best with the political economy of effective reform". more

The Netherlands is starting a huge data gathering exercise to measure all current and expected pension sources by individuals. While that may be valuable information, it's not easy to see why Dutch policymakers should do it. more

In 2005, Australia improved tax incentives for the compulsory Tier 2. It will increase contributions and cost taxpayers more. But why? more

Australia has run persistent current account deficits for more than two decades. Without a compulsory Tier 2 savings scheme, they would have been higher. But then ..? more

After 8-14 years of a comprehensive, compulsory Tier 2, it's unclear whether Australia's superannuation system is generating "satisfactory levels of private saving". more

Unemployment, or early retirement, close to pension age seems not to affect retirement incomes in Sweden. A future emphasis on defined contribution may change that, but may not. more

The politics of saving are often more prominent than the data. Information from New Zealand sheds needed light on the influence of housing on saving behaviour. more

Do tax breaks for US 401(k) schemes increase household wealth? This complex question has a surprising answer - possibly. But by a whole lot less than might be expected and perhaps not at all. more

The European old tend to be income poor but asset rich. Here is a new view, allowing for housing. Whichever way you look at it, the old seem to want to keep their homes. more

Intergenerational accounts seem to show that things must change for Polish pensions. What the Poles have done so far seems not very useful more

Policymakers worry that citizens do not behave rationally when deciding how much to save for retirement. Perhaps policymakers need not be so concerned.
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A new 75-page publication that provides "a concise outline of the historical development of Finnish social security" is so concise that its usefulness is limited. more

What, precisely, does it mean to "privatise" a public pension system? Don Fullerton and Michael Geruso explain that there are many definitions, which makes for "an increasingly muddled debate" more

From 2000, Swedes could choose where to invest 2.5% of their earnings from amongst 625 funds. We can't be sure why they have that choice and many Swedes seem not to care more