Dynamic incentives and retirement

This paper examines multi-period compensation contracts when retirement is anticipated. Short-term contracts in long-term employment relationships are equivalent to a long-term renegotiation-proof contract. The dynamic of incentive rates is determined by (i) how and in which periods managerial effort affects the contractible performance measures; and by (ii) the time-series correlation of error terms in performance reports. The model explains why long-term investments can decrease while incentive rates increase as managers approach retirement. Earnings persistence is negatively associated to earnings-based incentive rates but, towards retirement, high earnings persistence implies increasing earnings-based incentive rates.     

为领导排忧 帮群众解难——记工行北京市地安门支行老干部工作者张秀敏

张秀敏从地安门支行成立就负责退休、内退人员的管理工作。她把贯彻落实好老干部政策体现在具体行动上,坚持以人为本．把退休人员管理及服务工作做到位,认真落实老干部的政治待遇和生活待遇,得到了支行离退休人员的认可。她给自己的工作宗旨是：为领导分忧,为职工解难,切实履行岗位职责,努力做一个合格的老干部工作者。     

Private retirement savings and mandatory annuitization

The present paper studies the growth, welfare, and efficiency consequences of tax-favored retirement accounts in a general equilibrium overlapping generations model with idiosyncratic lifespan and labor income uncertainty. We focus on the implicit differential taxation of savings motives and the mandatory annuitization of withdrawals after retirement. The simulations performed for the German economy indicate that the differential taxation of savings motives has only modest efficiency effects but especially low-income households benefit. On the other hand, mandatory annuitization improves overall economic efficiency significantly by about 0.4% of aggregate resources, but future generations are hurt due to intergenerational income effects from reduced accidental bequest.     

Pension reform,retirement, and life-cycle unemployment

This paper investigates the labor market impact of four often proposed policy measures for sustainable pensions: strengthening the tax benefit link, moving from wage to price indexation of benefits, lengthening calculation periods, and introducing more actuarial fairness in pension assessment. We consider the impact on three margins of aggregate labor supply, retirement behavior, job search, and hours worked. We provide some analytical results and use a computational model to demonstrate the economic impact of recent pension reform in Austria. Reducing the distortion in the retirement decision by introducing pension supplements and discounts conditional on the chosen retirement date promises the largest gains. We also find that the pension reform is far from sufficient to offset the fiscal implications of projected demographic change in Austria.     

Asset allocation and age effects in retirement savings choices

We examine the asset allocation decisions of members of three large Australian retirement savings funds. Superannuation Guarantee legislation in 1992 made Australian employees compulsory investors by requiring employers to contribute a fixed proportion of earnings to a superannuation fund on behalf of employees. A majority of these employees can choose an investment strategy for these contributions. We examine how actual investment strategy and asset allocation choices of members change with age in view of the conventional wisdom that individuals allocate less to risky assets as they age and investments theory which provides conflicting advice on the issue.     

Seven myths of financial planning and baby boomer retirement

Myths are tales that combine fact and fiction. Commonly shared business myths help provide the foundation for underlying beliefs about what is important, what matters to the customer, and explain or justify business practices. While myths can be a means to structure information and knowledge, they can also be barrier to innovation in a changing market. The changing demographics in all industrialised markets and the coming retirement of the baby boom generation pose challenges to seven commonly accepted myths among financial planners about who customers are, what they want and the most effective ways to deliver service value. This paper examines these widely held ‘industry beliefs’ and suggests strategies that product developers and planners might consider to improve practice management and to grow new business in an ageing marketplace.     

Designing and managing employer-sponsored long-term care plans

Due to prevalent demographic factors, long-term care is an issue of increasing concern to American workers. The cost and time involved in ever-expanding long-term care responsibilities for many employees has resulted in increased indirect employer costs. The authors argue that providing' long-term care as part of the employee benefit plan is an efficient and effective way to manage these increasing costs for both the employer and the employee. The article offers discussion of plan design for long-term care, including issues to be considered and strategy for plan management.     

CEO incentive plans and corporate liquidation policy

To investigate CEOs' incentives to liquidate their firms, we examine the effects of insider ownership and compensation in stock options on 30 voluntary liquidation decisions by industrial firms in the period 1975–1986. We find that liquidation decisions are influenced by CEO incentive plans and increase shareholder value. Firms with more outside board members, smaller market-to-book ratios, and attempts by outsiders to gain control are more likely to be liquidated. Although few top executives of liquidating firms subsequently take comparable jobs, at least 41% of CEOs who downsize are made better off by liquidation.     

Account-based plans curb costs and engage employees

A growing number of organizations are combining consumer-driven health plans with account-based approaches in order to limit health benefit costs, reinforce key consumerist messages and provide meaningful benefits to both actives and retirees. This article describes how account-based approaches work and can be used to motivate employees to invest in their health today and salt away funds for tomorrow. The author describes what employers can do to ensure that consumer-driven health plans and account-based approaches help employees accomplish their goals.     

How universal health care would influence decisions about work and retirement

The current U.S. health care system distorts individual decisions about work and retirement. After a brief explanation of how the current health care system works, this article reviews those distortions and considers how individuals would respond to the implementation of a universal health care system. The author argues that the likely adverse impacts of an employer health insurance mandate on low-skilled workers could be more than offset by a well-designed system of government subsidies.     

Financial literacy and voluntary savings for retirement: novel causal evidence

ABSTRACT

We utilise recent Household Finance and Consumption Survey microdata to report first causal effects of financial literacy on voluntary private pension schemes participation for a Central and Eastern European (CEE) country, namely Slovakia. Savings for retirement in the supplementary pension schemes are positively associated with financial literacy after controlling for a set of relevant socio-economic variables. One additional correctly answered financial literacy question leads to a 5.6 percentage points increase in the probability of having a voluntary pension savings plan in our ordinary least squares estimates. The causal impact of financial literacy increases to 19.5 percentage points when we address potential endogeneity problems by novel to the literature instrumental variables.     

Commentary: Managing pension and retirement assets: An international perspective

Commentary: Managing pension and retirement assets: An international perspective     

Making medical and disability benefit plans more manageable

Good managed care health systems require two criteria for success: They must offer a set of checks and balances, and employees need to be given incentive to act in the best interest of the organization by acting in their own best interests. The authors discuss six principles that they claim are likely to reduce the complexity of making routine coverage decisions, while achieving the above two criteria.     

Criteria affecting Taiwan wealth management banks in serving high-net-worth individuals during COVID-19: a DEMATEL approach

Journal of Financial Services Marketing - Wealth management services for high-net-worth individuals in Taiwan have grown rapidly over the last decade. This study used a decision-making trial and...     

Power and ideas: The development of retirement savings taxation in Australasia

New Zealand and Australia have adopted vastly different approaches to retirement savings and its associated taxation. Two fundamental differences exist: New Zealand offers little in the way of tax incentives for retirement savings and there is no compulsion for retirement savings; Australia provides highly concessionary tax incentives and has a mandatory occupational retirement savings scheme. This paper uses a historical institutionalism theoretical framework to investigate the events that led to these diverse approaches in retirement savings taxation between two countries that frequently adopt similar policy ‘solutions’.The research highlights the importance of power and ideas in the policy development process. Power imbalances among institutions and individuals facilitated the pursuit of tax and retirement savings policy arrangements that were aligned with the world view of privileged elites. Ideas justified the policy direction adopted in each country and assisted in legitimising the power granted to actors and institutions that supported the prevailing ideology. The strongest ideas were found in New Zealand, where reform was the most radical.