Many people thinking about Social Security benefits focus only on how soon they can file. But in a new research study, Olivia S. Mitchell, Wharton Professor of Insurance/Risk Management & Applied Economics/Policy and Director of the Pension Research Council, along with colleagues Jingjing Chai, Raimond Maurer, and Ralph Rogalla of Goethe University, have come up with a plan to change the conversation.
“By permitting people to delay their retirement dates with a lump sum option, workers would continue to pay Social Security payroll taxes for more years, which could help return the system to solvency via additional payroll tax collections,” the scholars write. See an article about their study here.
Public employers across the country are following Detroit’s lead by withdrawing health insurance coverage for retirees and sending them to healthcare exchanges set up under the Affordable Care Act.
Olivia S. Mitchell, Executive Director of Wharton’s Pension Research Council, notes that “since the passage of the Affordable Care Act, … every public-sector employer is looking at the exchanges as a potential way to get out of the unfunded liabilities that the public sector is bearing.” She adds: “Older people’s healthcare is much more expensive.”
In 1988, two-thirds of private-sector employers offered retiree health care; by 2013, fewer than one-quarter did so. The public sector has been slower to do away with retiree healthcare, in part because unions have continued to negotiate for the benefit. Nearly 80 percent of state and local government organizations still offer retiree healthcare, though the prognosis is not good.
See an article about this study here.
The California Public Employee’s Retirement System or Calpers plans to shed nearly $4 billion dollars of hedge fund investments. “Calpers has always been a leader in the public pension space,” says Olivia Mitchell, Wharton Professor of Insurance/Risk Management and Applied Economics/Policy and Director of the Pension Research Council. “Certainly others will take a good look at their hedge fund portfolios.”
Read the full article here at Marketplace.org
A recent panel discussed efforts to strengthen retirement planning through financial literacy, given that it is now more important than ever to save for retirement. Unfortunately, many workers are penalized by low levels of financial sophistication resulting in poor financial planning. Panelist Olivia S. Mitchell, Wharton Professor of Insurance/Risk Management and Applied Economics/Policy and Director of the Pension Research Council spoke on these themes, along with Carlos Ramirez, President of the Mexican National Commission for the Pension System. He is responsible for the Commission’s financial literacy initiative and for regulating Mexico’s pensions. Bettina Von Jagow, Chairwoman of My Finance Coach, is a former professor of literary and cultural sciences at the University of Erfurt, Germany; the foundation seeks to improve students’ understanding of finance.
Click here to read the full discussion on financial literacy at ProjectM-Online.com
For over 40 years, the Wharton Seminars for Business Journalists have provided several thousand members of the media insight from Wharton faculty into topics such as financial markets, accounting principles, corporate strategy and the global economy. Attend a Philadelphia flagship program, held annually on the University of Pennsylvania campus at the Wharton School’s Jon M. Huntsman Hall. Learn business concepts from such renowned Wharton professors as Jeremy Siegel, Olivia Mitchell, and Brian Bushee.
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The Pension Research Council is pleased to announce that Allianz Asset Management/PROJECT M has rejoined the Council as a Senior Partner of the Council for 2014. Read the full press release here.
Olivia S. Mitchell, Wharton Professor of Insurance/Risk Management and Applied Economics/Policy and Director of the Pension Research Council, and her coauthor Annamaria Lusardi of George Washington University, designed a simple financial literacy survey, which they fielded on older Americans. Shocked at the poor results, they then launched an international study to determine how our population compares to other countries.
The Germans and Swiss were relatively savvy, where a small majority (53% and 50%, respectively) got all three questions right. Only 30% did so in the U.S and 27% in Japan. Russians fared worst of the nations examined.
Click here to read about the results on BloombergView.com
Being a ‘thief of your own wallet’ is how the Dutch describe those who overspend and thereby undermine their financial wellbeing. A new study by Olivia S. Mitchell, Wharton Professor of Insurance/Risk Management and Applied Economics/Policy and Director of the Pension Research Council, coauthored by Annamaria Lusardi of George Washington University, shows that we all do this, not just the Dutch!
Many Americans lack an understanding of interest rates, inflation, and diversification. Without proper financial knowledge, people make poor informed financial decisions. Unsurprisingly, this leads them to undertake more borrowing, engage in less saving, and overspend on fees.
Click here to read more at ProjectM-Online