RetireSecure Blog

July 21, 2015

Public Pension Changes Can Be Costly

Filed under: New Research,PRC in the News,Retirement Research — The Pension Research Council @ 3:16 pm

A recent study, “Lessons for Public Pensions from Utah’s Move to Pension Choice,” showed that many public sector workers offered less generous pensions did not boost their supplemental saving to make up for it. Robert L. Clark (Poole College of Management at North Carolina State University); Olivia S. Mitchell (Wharton Professor of Insurance/Risk Management & Applied Economics/Policy  and Director of the Pension Research Council); and Emma Hanson (North Carolina Department of State Treasurer Retirement Systems Division) coauthored the study.

The team followed pension reforms in Utah implemented in 2011 that closed the state’s defined benefit plan to new employees and established a less-generous two-option replacement. To make up the shortfall, new hires could contribute to a state supplemental plan, but many people did not.

The authors report that nearly three of five new hires failed to elect between the two-option plan, so they were defaulted to the hybrid pension. And defaulters also saved less, on average, than did the active choosers. Moreover, turnover rates rose by one-third among the new hires. The researchers conclude that plan administrators should be aware of possible side effects of changing plan generosity.

To read more on this story click here.

Advertisements

July 1, 2015

What Do the Experts Say About Long-Term-Care Insurance?

Filed under: Personal Finance,Planning for Retirement,PRC in the News — The Pension Research Council @ 8:53 am

The median price of a private room in a nursing home in 2014 was $240 per day ($87,600 per year). Despite the staggering cost of long term care, very few insurers sell policies covering it. A recent study by Wharton Professor Daniel Gottlieb and Wharton Professor of Insurance/Risk Management & Applied Economics/Policy, and Director of the Pension Research Council, Olivia Mitchell explains why.

“People hate buying insurance, thinking they could die the next day,” Mitchell said. “They feel they won’t get value for their money.”

Erin E. Arvedlund of the Philadelphia Inquirer asked a panel of financial advisers what kind of long-term care insurances they buy for themselves.

To read their answers click here.

June 5, 2015

Burnishing Our Golden Years

Filed under: Personal Finance,Planning for Retirement,PRC in the News — The Pension Research Council @ 11:22 am

Robert Powell recently interviewed Olivia S. Mitchell, Wharton Professor of Insurance/Risk Management & Applied Economics/Policy, and Director of the Pension Research Council, to discuss solutions for America’s retirement system problems.

Dr. Mitchell and a few of the country’s other leading retirement experts outlined several ways to help Americans preserve their living standards through retirement, including:

  • Workers must save more;
  • People can claim their Social Security benefits later;
  • Retirees can buy insurance products to hedge longevity risk;
  • Homeowners can access their home equity via reverse mortgages;
  • Policymakers can reform Social Security by pegging benefit growth to price rather than wage inflation;
  • Plan sponsors can boost access to retirement saving plans;

As Americans live longer into retirement, following these recommendations will help maintain our standards of living and ensure the promise of our golden years.

Read more about this story here.

September 17, 2014

Calpers Drops Hedge Funds

Filed under: Planning for Retirement,PRC in the News,PRC Partners — The Pension Research Council @ 2:18 pm

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

August 26, 2014

Who Will Provide?

Filed under: Financial Literacy,Planning for Retirement,PRC in the News — The Pension Research Council @ 8:55 am

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

July 29, 2014

Don’t Bother Discussing Interest Rates and Bond Prices

Filed under: Financial Literacy,New Research,Personal Finance,PRC in the News — The Pension Research Council @ 12:40 pm

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

July 25, 2014

Thieves of Their Own Wallet

Filed under: Financial Literacy,New Research,PRC in the News,PRC Partners — The Pension Research Council @ 9:59 am

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

More...

July 10, 2014

Financial Literacy Could Help Build 401(k) Savings, Study Shows

Filed under: Financial Literacy,New Research,PRC in the News,PRC Partners,Uncategorized — The Pension Research Council @ 9:41 am

A new working PRC paper titled “Financial Knowledge and 401(k) Investment Performance” reports that more financially knowledgeable investors can anticipate earning 130 basis points more per year in their 401k plans  compared to their less sophisticated peers, even after adjusting for risk.

The research is authored by Robert Clark of North Carolina State University, Annamaria Lusardi of George Washington University, and Olivia S. Mitchell, Professor of Insurance/Risk Management and Applied Economics/Policy and Director of Wharton’s Pension Research Council. It finds that “the significantly higher risk-adjusted annual expected returns of 130 basis points for the best versus the least knowledgeable confirm that financial literacy can contribute” to better retirement saving..

The study concludes that, since “financial knowledge does appear to help people invest more profitably, this may provide a rationale for efforts to enhance financial knowledge in the population at large.”

Click here to read a discussion of the work at ThinkAdvisor.com

More...

June 30, 2014

Pension Research Council Welcomes MetLife, Inc. as Senior Partner

Filed under: PRC in the News,PRC Partners,Uncategorized — The Pension Research Council @ 9:50 am

The Pension Research Council is pleased to announce that MetLife, Inc. has rejoined the Council as a Senior Partner of the Council for 2014. Read the full press release here.

More...

June 27, 2014

Pension Research Council Welcomes Retirement Made Simpler as Senior Partner

Filed under: PRC in the News,PRC Partners,Uncategorized — The Pension Research Council @ 10:46 am

The Pension Research Council is pleased to announce that Retirement Made Simpler has rejoined the Council as a Senior Partner of the Council for 2014. Read the full press release here.

More...

Next Page »

Blog at WordPress.com.

%d bloggers like this: