Wednesday, January 25, 2012

New papers from the Social Science Research Network

"Pensions, Privatization and Poverty: The Gendered Impact"
Canadian Journal of Women and the Law, Vol. 23, No. 2, pp. 661-685, 2011

CLAIRE YOUNG, University of British Columbia - Faculty of Law

This article focuses on the disparate impact of Canadian pension policy on women as compared to men, which in turn contributes to the poverty experienced by elderly women in retirement. The major contributing factor is the increasing privatization of the responsibility for economic security in Canada, with a preference for reliance on the private market or private family rather than on the state to provide for the welfare of its citizens. The article discusses the negative impact on women of issues such as the trend towards the establishment of defined contribution workplace pension plans rather than defined contributions plans, the increasing use of tax expenditures to encourage private retirement savings, and pension income splitting. The analysis takes place against the backdrop of the socio-economic realities of women’s lives and concludes that public pensions such as the Old Age Security pension and the Canada Pension Plan must be strengthened if women’s economic inequality in retirement is to be redressed.

"I Do...Want to Save: Marriage and Retirement Savings in Young Households"
Journal of Marriage and Family, Vol. 74, pp. 86-100, 2012

MELISSA KNOLL, Social Security Administration - Office of Retirement Policy
CHRISTOPHER R. TAMBORINI, U.S. Social Security Administration
KEVIN WHITMAN, U.S. Social Security Administration

Increased policy and academic attention has been placed on promoting retirement savings early in the life course. This study investigates the extent to which retirement savings behavior among young persons, a population for which retirement savings is important but typically low, differs by marital status. We draw national survey data on young adult households (ages 22–35; N = 3,894) from the U.S. Federal Reserve Board's Survey of Consumer Finances (SCF). Results reveal considerable differences by marital status. Controlling for important characteristics, young adults who were married were more likely than all other groups (including cohabitors) to perceive retirement as an important savings goal and to have an individual retirement account. Married persons were more likely than their single counterparts to participate in a defined contribution pension plan. Single women fared particularly poorly on retirement savings outcomes. A range of possible theoretical links between marriage and retirement savings at young adulthood are discussed.

"Portfolio Restriction to Impose on Defined Benefit Pension Plans"

KATARZYNA ROMANIUK, Université de Paris 1 Panthéon-Sorbonne, Universidad de Santiago de Chile

When a firm sponsoring a defined benefit pension plan approaches financial distress, the Pension Benefit Guaranty Corporation (PBGC) insurance effect materializes and the optimal pension portfolio policy becomes aggressive. In this configuration, a regulation restricting the pension investment strategy is needed. We suggest that the restriction imposed should follow asset-liability management principles. A low risk investment policy, as defined by the preference-independent liability hedge only, should be the regulator's benchmark. We recommend that the risky asset proportion maximum limit is fixed at 30%.


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