Announcements

THE SOCIAL INSURANCE RESEARCH NETWORK (SIRN), sponsored by the National Academy of Social Insurance (NASI) The Social Insurance Research Network (SIRN), directed by Larry Atkins, President, National Academy of Social Insurance, is an online venue providing access to scholarly research and professional announcements in the Social Insurance community. Social Insurance includes the systems for insuring workers and their families against economic insecurity caused by the loss of income from work and the cost of health care, such as Social Security, Medicare, Workers' Compensation, unemployment insurance, related social assistance and private employee benefits. NASI is a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance. Its mission is to promote understanding and informed policymaking on social insurance and related programs through research, public education, training, and the open exchange of ideas. SIRN is dedicated to increasing communication among social insurance scholars, practitioners, and policy makers throughout the world.


Table of Contents

Determining Equivalent Charges on Flow and Balance in Individual Account Pension Systems

Luis Chavez-Bedoya, Esan Graduate School of Business

Retirement Security 2015: Roadmap for Policy Makers - Americans’ Views of the Retirement Crisis

Diane Oakley, National Institute on Retirement Security
Kelly Kenneally, Independent

Personality and Planning for Retirement: How the Big Five Personality Traits Link to Decisions on Pension Participation

Jiayi Balasuriya, University of Hertfordshire - Business School, City University of London - Sir John Cass Business School

The Economic Consequences of Pension Underfunding: Evidence from the Retirement Systems of Alabama

Daniel J. Smith, Troy University - Manuel H. Johnson Center for Political Economy
John A. Dove, Troy University - Manuel H. Johnson Center for Political Economy

Would it Work? A Notional Defined Contribution Scheme Combining Retirement and Long-Term Care

Javier Pla-Porcel, GMS Management Solutions S.L. - Risk Department
Manuel Ventura-Marco, University of Valencia - Faculty of Economics
Carlos Vidal-Meliá, University of Valencia - Department of Financial Economics


SOCIAL SECURITY, PENSIONS & RETIREMENT INCOME eJOURNAL

"Determining Equivalent Charges on Flow and Balance in Individual Account Pension Systems" Free Download
Journal of Economics, Finance & Administrative Science, Vol. 21, pp. 2-7, 2016

LUIS CHAVEZ-BEDOYA, Esan Graduate School of Business
Email:

In this article, we determine a charge on balance that is equivalent to a certain fixed charge on flow for a particular utility–maximizer affiliate participating in a defined-contribution pension fund under the system of individual accounts. We also prove, under market completeness, that the equivalent charge on balance depends only on the current level of the charge on flow, the length of the accumulation period and the risk free rate of return.

"Retirement Security 2015: Roadmap for Policy Makers - Americans’ Views of the Retirement Crisis" Free Download

DIANE OAKLEY, National Institute on Retirement Security
Email:
KELLY KENNEALLY, Independent
Email:

A new nationwide public opinion research report finds that an overwhelming majority of Americans – 86 percent – believe the nation faces a retirement crisis.

These findings are contained in a new research report, Retirement Security 2015: Roadmap for Policy Makers Americans’ Views of the Retirement Crisis.

More specifically, the research finds that:

1. An overwhelming majority of Americans believe there is a retirement crisis. Some 86 percent agree that the nation faces a retirement crisis, and 57 percent strongly agree there is a crisis.

2. Three in four Americans remain highly anxious about their retirement outlook, but the concern has dissipated slightly as the economy has recovered. Some 74 percent of Americans percent say they are concerned, down from 85 percent as reported in the 2013 study.

3. Even though Americans feel slightly less stressed about their retirement prospects, support for steady and reliable retirement income from a pension is high and growing. In fact, 82 percent say a pension is worth having because it provides steady income that won’t run out, while 67 percent of Americans indicate they would be willing to take less in pay increases in exchange for guaranteed income in retirement.

4. Americans continue to feel that leaders in Washington do not understand their struggle to save for retirement, and they strongly support efforts by states to set up retirement plans for those workers without access to an employer sponsored plan. Some 87 percent of Americans say Washington policymakers do not understand how hard it is to prepare for retirement, while 84 percent say Washington needs to do more to help ensure retirement security.

5. Americans see retirement benefits as a job feature that is almost as important as salary. Salary is viewed as important by 75 percent of American, and retirement benefits are close behind at 72 percent.

6. Americans express strong support for pensions for public employees. Few Americans realize that 75 percent of public pension costs are paid for with employee contributions and investment returns. Some 87 percent of Americans say pensions are a good way to recruit and retain qualified teachers, police officers and firefighter. But, only one-fourth of Americans understood that public employers pay for 25 percent or less of public pension costs. More than eight out of ten — a vast majority of Americans — say that all employees, not just the public sector, should have a pension. Some 87 percent of Americans say pensions are a good way to recruit and retain qualified teachers, police officers and firefighters.

7. Protecting Social Security benefits is increasingly important. Some 73 percent of Americans say it’s a mistake to cut government spending in such a way as to reduce Social Security benefits for current retirees, up from 67 percent in 2013. When it comes to benefits for future generations, 69 percent oppose cutting government spending that reduces Social Security benefits. Americans are divided when it comes to increasing the amount of Social Security benefits by delaying the withdrawal of benefits at an older age: 42 percent agree with a delay while 52 percent disagree.

This biennial nationwide public opinion research is the fourth poll that measures how Americans feel about their financial security in retirement and assesses their views on policies that could improve their retirement outlook. It is intended to serve as a tool for policymakers, thought leaders and retirement service providers as they work to stem the retirement crisis and re-fortify the U.S. retirement infrastructure.

The polling was conducted by Greenwald & Associates as a nationwide telephone interview of 801 Americans age 25 or older. The data was balanced to reflect U.S. demographics for age, gender, and income. The margin of error is plus or minus 3.5 percent.

"Personality and Planning for Retirement: How the Big Five Personality Traits Link to Decisions on Pension Participation" 

JIAYI BALASURIYA, University of Hertfordshire - Business School, City University of London - Sir John Cass Business School
Email:

This paper investigates the relationship between the big five personality traits and participation in pension schemes using data from the British Panel Survey Panel (BHPS). Among the employed, we show that Neuroticism and Openness to experience are positively linked to joining a firm that runs an employer pension scheme. Extroversion and Openness to experience are negatively correlated with being a member of employer run pension schemes, which are consistent with previous literature on the positive links between Extroversion and Openness with risk taking behaviour. Conscientiousness increases an individuals’ likelihood of paying into private pension schemes. Among the self-employed sample, Agreeableness is positively related to paying into private pension.

"The Economic Consequences of Pension Underfunding: Evidence from the Retirement Systems of Alabama" Free Download

DANIEL J. SMITH, Troy University - Manuel H. Johnson Center for Political Economy
Email:
JOHN A. DOVE, Troy University - Manuel H. Johnson Center for Political Economy
Email:

There is a strong consensus among economists and public pension experts that many public pensions are substantially underfunded and that absent fundamental reform many state and local governments will have to resort to some mixture of tax increases, budget cuts, and/or bailouts. While many nation-wide empirical studies have evaluated the growth in unfunded pension liabilities, few academic case studies have been done for individual public pension systems to analyze specifically how these unfunded liabilities have accumulated and to formulate concrete avenues for reform. Therefore, this paper provides a case study of the Retirement Systems of Alabama. We find that Alabama is similarly situated relative to a number of other public pension systems in the U.S. when it comes to issues with accounting standards, transparency and oversight, and the use of economically targeted investments. Based on this work, we offer recommendations for reforming public pensions.

"Would it Work? A Notional Defined Contribution Scheme Combining Retirement and Long-Term Care" Free Download

JAVIER PLA-PORCEL, GMS Management Solutions S.L. - Risk Department
Email:
MANUEL VENTURA-MARCO, University of Valencia - Faculty of Economics
Email:
CARLOS VIDAL-MELI?, University of Valencia - Department of Financial Economics
Email:

The aim of this paper is to analyse whether it would be possible to provide retirement and long-term care benefits using the same unfunded notional defined contribution scheme. We extend the multi-state overlapping generations model developed by Pla-Porcel et al. (2016) to include two new features: a long-term care benefit graded according to the annuitant's degree of disability and a minimum pension benefit for both contingencies. This brings the model closer to the reality of social insurance and enhances its political attractiveness. The paper contains a numerical example to show how the model functions and focuses especially on the mortality rates for dependent persons, the inception rates from a healthy state to (any) disability state, and the probabilities of transition between one health status and another. The numerical example proves that the model works reasonably well and makes it clear that it has practical implications that could be of interest to policy makers. It also provides us with some useful values regarding the impact of introducing a minimum pension on the system's financial equilibrium and reinforces the fact that biometric assumptions need to be estimated accurately before any decision is made to put the model into practice.

^top

About this eJournal

This eJournal distributes working and accepted paper abstracts on all topics related to old age pensions and retirement. This includes papers on social security, employment based pensions and other publicly provided or tax-favored mechanisms for retirement income. The journal welcomes submissions from any discipline and a broad range of topic areas, including benefit adequacy, pension finance, the design and reform of social security and pension systems, retirement policy, and comparative analyses of U.S. pension and retirement issues with those of other countries.

Editors: Patricia Dilley, University of Florida, and Laurence Seidman, University of Delaware

Submissions

To submit your research to SSRN, sign in to the SSRN User HeadQuarters, click the My Papers link on left menu and then the Start New Submission button at top of page.

Distribution Services

If your organization is interested in increasing readership for its research by starting a Research Paper Series, or sponsoring a Subject Matter eJournal, please email: RPS@SSRN.com

Distributed by

Social Insurance Research Network (SIRN), a division of Social Science Electronic Publishing (SSEP) and Social Science Research Network (SSRN)

Directors

SIRN SUBJECT MATTER EJOURNALS

LARRY ATKINS
National Academy of Social Insurance (NASI)
Email: latkins@nasi.org

Please contact us at the above addresses with your comments, questions or suggestions for SIRN-Sub.

Advisory Board

Social Security, Pensions & Retirement Income eJournal

HENRY J. AARON
Bruce and Virginia MacLaury Senior Fellow, Brookings Institution - Economic Studies Program

KENNETH S. APFEL
Director, Management, Finance and Leadership Program - University of Maryland

MERTON C. BERNSTEIN
Walter Coles Professor of Law Emeritus, Washington University in Saint Louis - School of Law

BING YUNG-PING CHEN
Frank J. Manning Eminent Scholar's Chair in Gerontology, University of Massachusetts Boston - Gerontology Institute

ERIC R. KINGSON
Professor of Social Work and Public Administration, Syracuse University - School of Social Work

OLIVIA S. MITCHELL
Professor of Business Economics and Public Policy, Professor of Insurance and Risk Management, Executive Director, Pension Research Council, University of Pennsylvania - The Wharton School, National Bureau of Economic Research (NBER)

ALICIA MUNNELL
Peter F. Drucker Professor in Management Sciences, Boston College - Center for Retirement Research

JOHN L. PALMER
University Professor, Syracuse University - Maxwell School of Citizenship and Public Affairs

STANFORD G. ROSS
Attorney and Consultant, Arnold & Porter, Chair, Social Security Advisory Board

C. EUGENE STEUERLE
Senior Fellow, Urban Institute

LAWRENCE H. THOMPSON
Senior Fellow, Urban Institute

JACK VANDERHEI
Research Director, Employee Benefit Research Institute (EBRI)

JOHN B. WILLIAMSON
Professor of Sociology, Boston College - Department of Sociology