Search

This article examines the problem of missing and nonresponsive participants and beneficiaries from defined-benefit (DB) and especially defined-contribution (DC) pension plans, mainly in the private (for profit) sector of the United States. It focuses on the current search requirements of the three government agencies involved in finding missing participants and beneficiaries: the Pension Benefit Guaranty Corporation (PBGC), the Department of Labor (DOL) and its Employee Benefit Services Administration (EBSA), and the Internal Revenue Service (IRS). The article also reviews the efforts of the Social Security Administration (SSA) in this area. It then reviews proposed legislation, the Retirement Savings Lost and Found Act of 2020 (now S. 1730; RSLFA). The issue of missing participants and beneficiaries often becomes critical when an employer goes out of business or for some other reason stops sponsoring a pension plan. The missing participants are owed their earned retirement benefits. They, not the employer, own them.

How were comprehensive pension reforms in the UK successfully developed, enacted and implemented from 2002 to 2015, despite changes in government composition and the financial crisis? Why were they not subject to policy conflict, electoral competition and policy reversal? Drawing on actor-centred historical institutionalism and thirty interviews with key actors, we demonstrate the critical role played by a limited number of politicians and policy entrepreneurs and their ideas and agency. Institutional continuity with the Beveridgean policy legacies of the pension system and the United Kingdom’s `growth regime’ enabled a coalition space to open up for policy agreement. between the government and Opposition parties, and for partisan electoral competition over the reforms to be `bracketed’. The incremental and interlocking nature of the reform package reduced interest group opposition and enabled a centralisation of decision-making power. A long-term timeframe for reform cemented the formation of an elite coalition and buttressed political control. Cross-party support for the reform package, coupled with judicious phasing of the implementation of auto-enrolment and fiscal reforms, enabled it to withstand the impact of the financial crisis and the austerity that followed it, and to minimise opposition among the critical electoral constituency of older voters. The dominance of the reform process by political actors and policy entrepreneurs in the UK nonetheless came at a price, as institutional continuity and incrementalism foreclosed alternative reforms. We demonstrate the importance of political statecraft and policy entrepreneurship in the UK pensions’ reform process, but within boundaries set by its institutional context.

The supplementary occupational and individual pension systems in Central and Eastern European countries (CEE) are poorly regulated while their architecture is very complex. Law on supplementary pensions focuses on ensuring financial security of financial institutions, their liquidity and solvency, as well as on stimulating the development of additional pension protection understood as higher coverage and assets under management. The efficiency guarantees and cost limits have not been implemented and the profitability of such products for individual savers is rarely assessed. The analyses conducted on the regulation of voluntary old-age pension systems in Bulgaria, Estonia, Latvia, Lithuania, Poland, Slovakia and The Czech Republic indicated the main inadequacies of the supplementary old-age provision offered. They relate to the lack of preliminary and regular product assessment, inadequacy of plan design, efficiency and costliness. The recommended changes relate to risk sharing, forms of pension benefits, limits on costs, information policy and transparency.

This Special Issue addresses the concept of sustainability in pension systems from a wide range of perspectives. It examines the central questions raised about sustainable, socially responsible investments and other associated concepts by opening up a comprehensive discussion with an interdisciplinary approach. Normative trends and international cases are analysed in some detail concerning the situation of specific European Member States. Also, the concept of sustainability in European occupational pension schemes is questioned as an efficient vehicle able to assure adequate pension entitlements to all workers to avoid old-age poverty.

Defined benefit (DB) pension plans are the dominant retirement program for state and local governments in the United States. However, in the last 15 years, some have given new employees a choice of alternatives to stand-alone DB pension plans such as cash balance (CB), defined contribution (DC), and hybrid retirement plans. This article examines this shift through survival analysis using panel data of 190 state and local pension plans across the United States. From 2001 to 2019, we modeled five change factors found in the pension reform literature, namely, financial constraints, interest group influence, plan membership, and liability, along with other state factors. Our analysis shows that all five of these factors impacted the shift to alternative retirement plans from stand-alone DB plans. Notable findings are that well-funded pensions were more likely to shift to alternative retirement plans, and interest groups such as police, fire, and teachers were more likely to keep stand-alone plans.

Worldwide pension funds, in their capacity as large institutional investors, are under increasing pressure to take social and environmental considerations into account in their investment decision-making process. The concepts Socially Responsible Investment (SRI) and Environmental Social Governance (ESG) are indeed ubiquitous in the current investment and pension community. This article aims to provide some insight into the conceptual relationship between SRI and ESG and its legal implications for the investment behaviour of private pension funds in the USA and the EU. Hence, the first part of the article gives some background to the distinct concepts of SRI and ESG. This leads to the finding that SRI goes one step further than ESG by prioritising moral or ethical considerations that may not be material to an investment’s financial performance, whereas ESG functions as a guideline to enhance financial performance. The second part analyses the legal possibilities and constraints for responsible investment in American occupational pensions and the third part does the same for European occupational pensions. The article concludes with a summary and comparative overview of the American and European lessons.

This article examines the state of single-employer and multiemployer pension plans for the period 1980s to 2020 with particular attention to funding, Pension Benefit Guaranty Corporation benefit guarantees and intervention procedures, financial status, participant experience, employer premiums, and benefit payments. It then shifts to congressional efforts to save the plans beginning with the Multiemployer Pension Reform Act of 2014 and continuing through the complex development of the HEROES Act with its conflicting EPPRA and GROW Act provisions. Due to an unresolved conflict between the Senate Republicans and the House Democrats, the pension provisions were removed from the compromise legislation that was signed into law at the very end of the Trump Administration. The matter will be further addressed by the new Democratic-controlled Congress and the Biden/Harris Administration. However, that may take a while. The issues are complicated and the Congress may be busy with more pressing matters for some time to come.

The study investigated barriers and enablers that day labourers in East London, in the Eastern Cape Province of South Africa, experience while attempting to access temporary employment opportunities. The focus was on the constraints and enablers of the structures in East London’s local economy. The research adopted a sequential exploratory design, utilising a three-phase approach. The first phase of the study was a quantitative process to determine the socio-economic profile of the day labourers. The second and third phases were qualitative. In phase 3, semi-structured interviews were conducted with day labourers at three selected hiring sites. Political interference, lack of access to information, insufficient skills and skills accreditation, a difficult local business environment and limited access to the Extended Public Works Programme as a result of age and gender are the key endogenous and exogenous constraints and structures at play in the day labour market in East London. These structures render day labourers structurally vulnerable despite the agency and resilience displayed through their daily endeavours. The COVID-19 pandemic illustrates this vulnerability vividly. It is imperative that the government revisits relevant policies to accommodate the ‘missing middle’ still on the margins and outside the catchment area of protective measures.

Aims: This study explored the rate of transition from partial to full disability pension (DP) and aimed to determine whether age, sex, education, employment status, employment sector, pension type and medical cause of disability were associated with transition to full DP during a four-year follow-up. Methods: We used register data, including a 70% random sample of partial disability pensioners aged 20–58 at the time that their partial DP started in 2010 or 2011 ( N=5277). Competing risk analysis was used to estimate sub-hazard ratios (SHR) and their 95% confidence intervals (CI) for full DP. Results: One third of partial disability pensioners transitioned to full DP during the four-year follow-up. More than half (52%) continued on partial DP, and 15% were in some other state. Men, older people, those with low education levels, those whose pension was granted until further notice and those whose pension was due to mental disorders (MD) proceeded to full DP more often than others. The SHR for full DP was 1.62 (95% CI 1.43–1.83) among partial disability pensioners with MD and 1.15 (95% CI 1.02–1.28) among partial disability pensioners with other diseases compared to those whose pension was granted due to musculoskeletal diseases. Conclusions: Partial DP is a relatively stable state, and moving to full DP is relatively rare. However, male sex, older age, low education level, a pension granted until further notice and partial DP due to MD are important risk factors for full DP. The risk factors for ending up on full DP varies by diagnosis and pension type.

The present-day retirees may not be as well off as they expect to be during their retired life. Given the current state of the world – higher life expectancy, close to zero real interest rate and the economic turmoil caused by the Covid-19 pandemic, a superannuation fund as large as $545,000 may not be enough to support a comfortable lifestyle. The rules of means-tested age pension provide incentives for a broad spectrum of people to deplete their superannuation in the early years of retirement, with significant negative consequences for government finances. Spending at retirement does not increase proportionally with assets. For some range of superannuation balances, the net present value of spending could increase more than the increase in assets, as the net present value of the age pension does not decline at par with increases in assets. In other asset levels, the opposite happens. The distributional impact of the age pension is unequal across different asset levels and is regressive to some extent.

The influential World Bank Averting the old-age crisis study profoundly influenced pension policies around the globe, but nowhere more so than in Eastern Europe. While Western Europe dismissed radical carve-out pension privatization initiatives, Eastern European countries with similar Pas-As-You-Go legacies pursued World Bank reforms hoping to increase retirement incomes, spur economic growth, and hedge political risks inherent in public systems. However, 25 years later, reversals are taking place in all reforming countries, ranging from outright dismantling of mandatory private pension funds to their scaling-down and moving to voluntary participation. Empirical evidence presented in this article suggests that carve-out privatization failed to accelerate economic growth, while private pension funds turned out to be dynamically inefficient and inferior to PAYG systems they were intended to replace. We argue that the carve-out approach is the root cause of inherent economic and fiscal tension between public and private pension pillars. We identify a minimum set of Pareto improving reform adjustments that address the most pressing sources of economic inefficiencies and political instability by undoing the carve-out financing. The suggested re-reforms would be a first step in enabling private pension funds in Eastern Europe to become a meaningful supplement to existing PAYG benefits, in line with typical pension practices in Western Europe.

Although pension reform has been a global trend in the last couple of decades, public administration research has seldom addressed the issue of how targeted pension reforms affect civil servants. The goal of this study is to conceptualize pension reform as the breach of the psychological contract between the government and civil servants and to understand whether it leads to the experience of regret in civil servants over choosing a government career. In doing so, this study also explores the possible role of public service motivation (PSM) in moderating the experience of regret elicited by psychological contract breach as well as the negative perception of the pension reform. The analysis of the data collected from 944 Taiwanese public employees shows that (i) both psychological contract breach and negative perception trigger regret and (ii) PSM strengthens the impacts of psychological contract breach and the negative perception of the pension reform. The findings have critical implications for both practitioners handling pension reforms and researchers interested in building a theory of PSM.

It is widely recognized that there has been a massive shift from defined-benefit (DB) to defined-contribution pension plans. However, the full extent of that shift from fully functioning DB plans is generally understated. This article measures and relates the extent of that understatement and its importance for retirement income. It then discusses the increasing importance of cash balance and pension equity plans and their legality. It then conducts an in-depth discussion of large (Fortune 500) employers, small- and medium-sized employers, and then very small employers (25 or fewer active participants). It concludes that retirement income plans in the United States are far from static. Indeed, they have evolved throughout the era and will continue to do so in the future.

This article is an analysis of 31 defined benefit police and fire pension plans of 20 municipalities in Florida. The authors conducted a similar assessment of these same plans ten years earlier to determine the fiscal impact of these plans due to state mandates that accompany state funding for each of these plans. The current study analyzes key measures of fiscal health over the last ten years for these same plans to ascertain whether the fiscal condition of these plans remained constant, that is, whether underfunded plans continued to be questionably managed and whether well-funded plans continued to be fiscally stable considering economic trends and the lessening of state mandates on the use of state funding for these plans. The findings show that the overwhelming majority of the plans neither significantly changed their financial condition nor their general ranking among the plans evaluated.

The number of people aged more than 60 in Bangladesh is projected to constitute 20% of total population by 2051. The demographic momentum makes it necessary to pursue policies that guarantee a secured life for the country’s senior citizens. Currently, more than 40% of old age population (more than 65 years) in Bangladesh do not receive any type of pension or social security benefits. In this backdrop, introduction of a universal pension scheme (UPS) is an idea that should merit serious consideration. The idea of a UPS is also aligned with several Sustainable Development Goals (SDG) targets. Based on the International Labour Organization multi-pillar pension model, the article deals with required financing under different scenarios of introducing UPS in Bangladesh. The study estimates that for introducing a non-contributory UPS in Bangladesh, it would require an additional average allocation equivalent to 0.1%–0.5% of gross domestic product per annum between now and 2040. The article also estimates financing needs considering two options for the contributory UPS. The article concludes that UPS in Bangladesh can be launched on a limited scale which then could be expanded in scope and coverage in a gradual and phased manner. The article also underscores that introduction of UPS will create opportunities to rationalize the existing safety net programmes that will release funds for underwriting the UPS. JEL: H53, H55, I31, I38

Unfunded public pension obligations represent a great challenge for policy makers in the American states. We posit that a part of pension underfunding relates to the level of public corruption. Empirical findings in the article show that funding ratios in public pension funds are inversely related to the incidence levels of corruption in the state, with other fiscal, political, and institutional covariates held constant. We show that this can happen through higher pension benefits, lower actuarially required contributions (ARCs), lower percentage of actual ARC contributions, and poorer investment outcomes. Based on empirical estimates, we find that a reduction of corruption by one standard deviation around the mean would permit the states to save on pension benefits by 10.24% annually (or US$1,894.64 per recipient), increase required ARC by 4.40%, increase actual ARC contributions by 8.46%, and improve investment returns by 4.72%. Therefore, policies to reduce public-sector corruption, or to improve the insulation of pension funds in relatively more corrupt environments, can make a significant contribution toward tackling the public pension underfunding crisis in the American states.

In recent years, there has been a dramatic increase in the hard-freezing of defined benefit pension plans. Although cost savings associated with a pension freeze are expected to lead to improved future performance, prior studies do not provide conclusive empirical evidence to support enhanced firm performances following pension freezes. In this study, we examine how firms’ commitment to corporate social responsibility (CSR), especially their commitment to employee relations, affects their decision to freeze pension plans, and how firms’ CSR activities affect the association between the pension freeze and their post-freeze performance. First, we find no evidence that firms with a high overall CSR score are less likely to freeze their pension plans, but we find supporting evidence that firms with a high CSR score on the employee relation aspect are less likely to freeze their pension plans. In addition, we find that the pension freeze has a positive impact on the firm’s future performance, as measured by the return on assets, for the firms with high CSR scores.

Individuals’ need for extended working lives depends on the design of pension systems, including occupational pensions. This article examines variation in occupational pension generosity and coverage in Norway’s private sector. The analysis consists of microsimulations of future pension outcomes for cohorts born in 1953, 1963, 1973 and 1983. The first set of calculations estimate average pension levels for individuals with different pension packages who retire at 67; the second, how much longer workers in different cohorts will have to work in order to obtain a replacement rate of 70%. The overall finding is that while all workers in Norway must extend working life in the future, those with the most generous occupational pensions can retire about four years earlier than those with the least generous packages. This shows that the design and regulation of occupational pensions are crucial to the debate on extended working lives.

Some experts claim that U.S. local governments are experiencing dramatic increases in pension expenditures and that pension spending is crowding out government services. Others maintain that serious pension problems are limited. This issue is important to political scientists, urban scholars, and policy practitioners, but no existing studies—nor the datasets they rely on—allow evaluation of whether pension expenditures are rising or how they are affecting local government. This article analyzes a new dataset of the annual pension expenditures of over 400 municipalities and counties from 2005 to 2016. I find that pension expenditures rose almost everywhere over this period, but there is significant variation in that growth. On average, local governments are not responding to rising pension spending by increasing revenue. They are instead shrinking their workforces. Moreover, I find that the magnitude of the employment reductions due to pensions varies with key features of the political environment.

Since the 1990s, most Latin American countries have significantly expanded noncontributory pension programs. In explaining this wave of expansion, research has focused on the protagonism of left parties and social movements and on electoral competition, generally disregarding the roles of organized business and conservative policy experts. This article demonstrates, through a detailed analysis of Chile’s 2008 noncontributory pension reform, that conservative economists played active roles in formulating a noncontributory pension policy characterized by moderate, targeted, and “incentive-compatible” benefits and financed by the general budget. The conservative design of the program facilitated broad support from employers and private pension funds, critical for the eventual passage of the reform. The analysis illustrates the need to incorporate business interests into explanations of welfare state reforms in Latin America and the broader Global South, in particular by distinguishing the interests of employers and private providers and by focusing on their interaction with conservative policy experts.

The selection of actuarial assumptions used to value state and local government pension liabilities is an important culprit of the looming state and local pension crisis in the U.S. Due to the impact these selection choices have on the value of pension liabilities and annual required contributions (ARC), pension plans are often said to make these choices opportunistically for purposes of freeing up budget resources and making pension funding look better. Using empirical data on 114 state-administered pension plans, this research shows that the likelihood of such opportunistic pension accounting choices (OPAC) increases when the plan is underfunded, organized as a cost-sharing plan, governed by a politically embedded fiduciary body, and when the sponsoring government is surrounded by a high degree of unionization, and is divided in terms of partisan control. The results also show that the likelihood of OPAC decreases when a pension plan is subjected to an audit by a Certified Public Accountant (CPA), suggesting that professional gatekeepers can play an important role in limiting the adverse effects of OPAC behavior, including insufficient ARC payments and reduced transparency of governmental financial reports.

The latest UK and Norwegian state pension reforms have reflected contrasting policy design in the balance of private pensions, savings and state provision. Nevertheless, we argue that both governments have in many ways adopted strikingly similar approaches in seeking public acceptance of these potentially controversial reforms, employing a similar repertoire of discursive elements to persuade populations about their logic and rationality. Based on critical analysis of government policy papers, speeches and parliamentary debates, we find that both countries emphasise ‘sustainability’ and ‘fairness’ within an increasingly individualised context where both systems are characterized as facilitating individuals’ efforts to attain security in retirement through ‘choice’ or ‘flexibility’. Significantly, contrasting symbolic metaphors are adopted to situate these reforms, and their proponents, within the heritage and traditions of their different welfare systems, which we find is a key element in successfully implementing the reforms. We note the implications of this research for the analysis of European state pension reform.

Why do some Chinese local governments include informal workers in their welfare systems while others exclude them? This article argues that local officials attempt to balance multiple, conflicting, top-down career-evaluation criteria by developing different inclusion mechanisms. The central mandate to build an inclusive welfare regime incentivizes local officials to embrace welfare “outsiders” (informal workers and nonlocal workers). However, other top-down policy goals and the locally defined citizenship ( hukou) system disincentivize the full integration of outsiders. Faced with this political dilemma, local officials have strategically incorporated different types of outsiders into their welfare regimes. Their strategies depend on local labor market structures—specifically, the extent to which informal workers overlap with nonlocal workers. This hypothesis is tested using an original data set derived from thirty-one Chinese provinces, covering the period between 2005 and 2015, as well as two rounds of national-level survey data. Findings suggest that recent Chinese welfare expansion has ironically consolidated, even exacerbated, regional inequality.

Many state and local governments have responded to financial challenges facing their pension systems by cutting benefits or by shifting costs to employees. Will these changes make it harder for state and local governments to recruit highly skilled workers? This study explores this question by linking individual-level data from the Current Population Survey on worker transitions between the private and public sectors to measures of state and local pension generosity from the Public Plans Database. The results suggest that state and local employers with relatively generous pensions are better able to recruit high-wage workers from the private sector, but that this advantage is lost as workers are asked to contribute more from current paychecks to prefund those benefits. The findings help inform an ongoing debate over the role that state and local pensions play in shaping the public workforce.

Financial advisors seek to accurately measure individuals’ risk preferences and provide sound personalized investment advice. Both advice tasks are increasingly offered through automated online technologies. Little is known, however, about what drives individuals’ acceptance of such automated financial advice and, from a consumer point of view, which firms may be best positioned to provide such advice. We generate novel insights on these questions by conducting a real-world empirical study using an interactive automated online tool that employs an innovative computer algorithm to build pension investment profiles, the “Pension Builder,” and a large, representative sample. We focus on the role that two key firm characteristics have on consumer acceptance of pension investment advice generated by computer algorithms running on automated interactive online tools: profit orientation and role in the sales channel. We find that consumers’ perceptions of trust and expertise of the firm providing the automated advice are important drivers of advice acceptance (besides a strong impact of the satisfaction with the consumer–online tool interaction), and that these constructs themselves are clearly influenced by the for-profit vs. not-for-profit orientation and the product provider vs. advisor only role in the sales channel of the firm providing the advice. We discuss the implications of our findings for marketers and policy makers and provide suggestions for future research.

This commentary examines the Court of Appeal’s decision in R (Delve and Glynn) v. Secretary of State for Work and Pensions, which concerned the judicial review of the incremental increase of the state pension age in the United Kingdom for women born in the 1950s. It focuses on the claims of discrimination contrary to Article 14 of the European Convention on Human Rights, in particular the discussion relating to indirect sex/sex and age discrimination. It is argued that there is scope for greater clarity in the Court’s reasoning which led to its conclusion that the measures did not result in indirect discrimination contrary to Article 14. However, the dismissal of each appeal is not surprising, in view of the adoption of the ‘manifestly without reasonable foundation’ test when scrutinising decisions relating to social welfare policy. In other words, even if the measures resulted in indirect sex discrimination, they were justified.

Background: The pension age in Denmark is adjusted in line with projected increasing life expectancy without taking health differentials between occupational groups into account. The purpose was to study occupational disparities in partial life expectancy and health expectancy between the ages of 50 and 75. Methods: Register data on occupation and mortality were combined with data from the Danish part of Survey of Health, Ageing and Retirement in Europe in 2010–2014 ( N=3179). Expected lifetime without and with activity limitations and without and with long-term illness was estimated by Sullivan’s method and comparisons made between four occupational groups. Results: We found clear differences between occupational groups. Expected lifetime without activity limitations between the ages of 50 and 75 was about 4.5 years longer for men and women in high skilled white-collar occupations than for men and women in low skilled blue-collar occupations. Men in high skilled blue-collar and low skilled white-collar occupations could expect 2.3 and 3.8 years shorter lifetimes without activity limitations, respectively, than men in high skilled white-collar occupations. For women in low skilled white-collar occupations, lifetime without activity limitations was 2.6 years shorter than for women in high skilled white-collar occupations. Due to few observations, no results were obtained for women in the high skilled blue-collar group. The social gradient was also significant when health was measured by years without long-term illness. Conclusions: The results support implementation of a flexible pension scheme to take into account the health differentials between occupational groups.

A growing number of countries have introduced noncontributory pension to guarantee a minimum income for disadvantaged seniors. The current state of knowledge does not inform us how this change has impacted senior tourism demand and industry. Additional pension income may relax budget constraints and provide an opportunity to fulfill a desired level of tourism. For disadvantaged elderly, however, its impact on tourism choice is not clear because of consumption needs for other necessities and limited mobility. This study examines a recent social pension reform in South Korea to study the impact of old-age income security on tourism demand. We find that a doubling of public pension benefits is associated with an average of 23–59.5% increase in travel frequency and 52–96% rise in travel spending among benefit-eligible seniors. These results suggest that pension reforms aiming to improve old-age income security will have a positive influence on the tourism and hospitality industry.

This article analyses and compares President Bachelet’s successful efforts to reform the Chilean pension system in 2008 and her failure to achieve the same objective in 2017. The article addresses the impact of electoral promises, policy legacies, policy ideology, presidential power, the role of the private sector, and the role that the government coalitions had in the process of pension reform during the Bachelet administrations. We argue that the 2008 reform was possible because of Bachelet’s personal commitment to reform and the presence of a stable governing coalition that had the will and capacity to legislate. In the second administration, although the policy legacies and ideology had remained the same, the reform did not materialise due to intense conflict within the administration and within the government coalition, as well as conflict between the administration and the coalition. These conflicts, in turn, generated a vicious cycle responsible for Bachelet’s declining popularity, limited political capital, and reduced support for reform. A stagnant economy further undermined these efforts. In brief, this article argues that when assessing success and failure in pension policy reform it is important to analyse not only policy legacies and political ideology but also the strength of the executive, the cohesion of the governing coalition, and the country’s economic performance.

This study contributes to the literature on pension reforms by evaluating the Turkish case within a theoretical framework drawing on financialisation as extensive and intensive accumulation of finance assets. Financialisation refers to the expansion of finance into ever more areas of economic and social life while increasing its depth through more sophisticated financial operations. The Turkish pension reform, which has been run under the influence of global policy actors, illustrates the integration of finance with social policy. The intensification of dependence upon finance is demonstrated by the Turkish pension funds that stimulate innovation of financial instruments through demand-side impacts on capital markets. The critical analysis of financialised pensions reveals that the social policy advice of international financial institutions, with motives to extend financial markets, exacerbates class and gender inequalities. JEL Classification: G230 Pension funds; J140 Ageing, Pension; N2 Financialisation

When policy advocates debate how best to ensure equity in public education funding, the topic of teacher pension reform rarely comes up. But, in fact, pensions represent a very large and fast-growing source of education spending, much of it distributed in ways that are, in a number of states, anything but equitable. When states subsidize teacher pensions directly, rather than expecting local school systems to fund those pensions themselves, affluent districts tend to benefit the most.

Traditional employer-sponsored defined-benefit pension plans in the private sector that provided lifetime benefits have declined precipitously since 1985. They have been largely replaced by Section 401(k) plans in which investment control, market risk and longevity risk have been transferred from the employer to the participant. Most participants opted for the low-yielding money market plan default option, which proved inadequate for providing viable retirement income. The Pension Reform Act of 2006 made two important changes to 401(k) plans: (1) allowed automatic enrollment and (2) allowed target-date funds as a “qualified default investment alternative.” This article examines the evolution from defined-benefit pensions to target-date funds and the closely related collective investment trusts.

How do institutional logics travel within a political economy? Employing insights from historical and ideational institutionalist theory, this article offers a novel understanding of change dynamics as driven by actors’ creation of institutional interlinkages. It develops the causal mechanism of “invasion from within,” consisting of a three-stage process: the progressive weakening of a policy paradigm within one institutional site coinciding with a strengthening of the policy paradigm in another; the building of a coalition within the exporting field; and the use of framing strategies to “localize” adjacent logics of action and delegitimize adversarial coalitions. The analytical purchase of the argument is corroborated through process tracing of the German pension paradigm shift during the 1990s, showing that ideas about private capital formation developed in finance were redirected toward old-age provision and strategically transferred to the pension arena by a coalition of actors from the German finance domain.

This study examines differences in life satisfaction between full retirees and working retirees in Europe. We hypothesize that these differences depend on the financial resources of retirees and the resources available in the household and country context. We selected retirees from the “Survey of Health, Ageing and Retirement in Europe” project and estimated country fixed effects models to explain their life satisfaction. The results indicate a positive relationship between working after retirement and life satisfaction for retirees with low pension income without a partner. Additionally, working after retirement seems to be most important for life satisfaction in relatively poor countries.

In 2008, Sweden introduced a policy change to limit the number of days for sickness benefits (SB). This study aimed to elucidate the characteristics of those who reached the maximum entitlement period for receiving sickness benefits (MEPSB) and their future main source of income. Methods: All 5,309,759 individuals, aged 20–63 and residents of Sweden in 2009 were followed from July 2008 to July 2010 regarding SB-days and date of MEPSB and then categorised into three groups: I) no SB-days, II) ongoing SB-days, and III) MEPSB. Mean numbers of SB-days 2.5 years before and 2 years after the policy change and main source of income in 2011 were assessed. Associations between sociodemographic factors, occupation and paid work as main source of income were estimated by odds ratio (OR). Results: A total of 0.7% reached MEPSB in 2010. The mean numbers of SB-days before and after the policy change were higher in the MEPSB group than in the other two groups. In the MEPSB group, 14% had their main source of income from paid work in 2011; this was more common among women born in Sweden (OR = 1.29), people living with a partner and children (women OR = 1.29; men OR = 1.48), and those with occupations representing high educational levels. Conclusions: One out of seven individuals with MEPSB in 2010 had their main source of income from paid work in 2011, although they had a long-term SB before and after the policy change. Further research is warranted to address the long-term effects of this policy change.

The portability of social benefits – such as the state pension, child allowances and unemployment benefits – for international migrants is regulated by social security agreements concluded between countries or at supra-national level, such as within the European Economic Area (EEA). Focusing on the United Kingdom, this article aims at capturing the main issues that have been recently raised by such agreements, with particular emphasis on the case of migration between the UK and Europe. The first part of the paper summarises the main consideration researchers and policy makers should bear in mind in looking at portability. Using data from the 2013 World Bank migration matrix, the second part of the paper compares the stock of British migrants residing abroad and the stock of foreigners living in the United Kingdom. The third part of the paper summarises the main issues that were raised in relation to the EEA multilateral agreement including the notion of residence, the state pension, family allowances, and the portability of health care benefits. The conclusions highlight the main concerns and options that lie ahead following the withdrawal of the UK from the European Union.

In an era of fiscal austerity and dualization of social protection, has organized labor become increasingly split along skill and industry lines? Against recent political science accounts of trade union involvement in social policymaking, this paper argues that, in the specific area of pensions, unions representing high-skilled workers and the core industrial sectors of the economy have paradoxically been led to increase their cooperation with unions representing the less privileged segments of labor, in order to improve coverage of private pensions across the board. These unions’ motivations for doing so and the strategies they have employed have nonetheless differed according to the preexisting institutional design of domestic pension systems. The argument is supported with case studies of British, French, German, and Belgian unions’ involvement in contemporary pension reform.

A growing body of research shows that economic, demographic, and institutional factors affect public pension funding. Most of these findings are based on the analysis of complete retirement systems, which are often funded by multiple plan sponsors. This article offers one of the first empirical analyses of the determinants of pension funding at the level of a city government that acts as a plan sponsor, often for more than one plan. Models predicting unfunded liabilities for a large national sample of cities over 2003–2012 suggest that city fiscal autonomy and reliance property taxes are additional pieces of the pension underfunding puzzle.

This paper explores the determinants and implications of the growing allocation of insurance companies and pension funds to emerging markets. The key contention put forward is that liabilities are at the core of the portfolio choice of insurance companies and pension funds, and that this has important consequences for the stability of asset demand. The paper supports this contention with a theoretical framework based on Hyman Minsky and the results from 22 semi-structured interviews with European insurance companies and pension funds’ executives, investment consultants, and asset managers. It shows that the rising insurance companies and pension funds’ demand for emerging markets’ assets has to be analysed in the context of the pressures resulting from structural funding deficits and low yields. Emerging markets’ assets are sought as part of the sector’s strategy to increase returns and, given their subordinate integration into a spatially uneven international monetary and financial system, remain not suited to directly meet insurance companies and pension funds’ liabilities. This causes insurance companies and pension funds’ demand for these assets to be volatile and independent of conditions in these countries, reproducing emerging markets’ monetary and financial subordination. By stressing the structural financial (in)stability implications insurance companies and pension funds’ liabilities have for emerging markets’ asset demand, the paper contributes to the literature on insurance companies and pension funds’ investments in emerging markets and bridges the gap between those which have noted the importance of liability conditions for insurance companies and pension funds and the literature pointing to the destabilising impact of insurance companies and pension funds due to behavioural and agency issues. Moreover, by basing itself on a Minskyan theoretical framework, it responds to recent calls for a more systematic incorporation of heterodox economic thought into financial geography.

Whereas research on corporate governance typically attends to the conflicting interests between shareholders and executives, in practice executives must frequently adjudicate the demands of multiple stakeholders. To investigate how executives cope with the divergent interests of workers and shareholders, the author examines how much firms claim they will earn on the assets in their defined benefit (DB) pension plans. In a DB arrangement, employees forgo wages in the present in order to receive postretirement income, and they rely on executives to properly fund and manage plan assets. Executives, however, can increase the amount they expect the firm to earn on plan assets, which increases firm earnings in the current period but may undermine workers’ retirement security if expectations do not match actual returns over time. The author shows that the influence and interests of employees and shareholders as well as the decision-making schemas of the CEO affect whether executives exercise this discretion.

The European Semester, launched in 2011, enhances the coordination of macroeconomic policies among European Union member states. This article contributes to the lively scholarly debate on whether this policy-making cycle has empowered more the European supranational or intergovernmental institutions. Drawing on a new dataset covering all pension-related country-specific recommendations between 2011 and 2016, and employing an original quantitative method, we show that the Commission mainly follows a ‘technocratic’ approach in drafting its recommendations, which are grounded in objective indicators. As the Council refrains from systematically altering the recommendations’ logic, we conclude that, at least in pension policy, the Commission’s role in macroeconomic surveillance has been significantly strengthened in the aftermath of the Great Recession.

Representative arrangements are widely employed in the governance of occupational pension funds, particularly in Australia where a sector of jointly employer/employee-sponsored ‘industry funds’ was established during the 1980s. The jointly governed industry funds are privately owned wealth-management businesses and have routinely outperformed the retirement-savings schemes run by the large listed for-profit providers. Seeking to understand why these examples of labourist ‘alternative organisations’ have outperformed more traditionally governed Australian wealth-management firms is the main purpose of this article.

Serbia is one of the rare eastern European countries that decisively dismissed the controversial pension privatisation agenda whereby mandatory private pension funds would be introduced to (partially) replace existing public pay-as-you-go (PAYG) benefits. Instead, Serbia opted for a more traditional western European approach, combining PAYG cost-containment parametric reforms with the introduction of tax-preferred supplementary private pensions. We explain that the desire for equitable intergenerational burden-sharing was one of the key factors behind the decision-making process that made Serbia diverge from regional trends and World Bank orthodoxy. Nonetheless, problems that have plagued mandatory private funds in neighbouring countries, such as excessive operating costs and undiversified portfolios, have also been prevalent in the Serbian voluntary private pension fund industry, which failed to achieve tangible labour market coverage and whose survival has been due mostly to exclusive tax privileges.

Pension reforms and the changing public/private pension mix of the last decades are well documented. However, a more detailed look at the design of occupational pensions reveals remarkable differences even in countries that are usually treated as similar in the literature. Germany and Austria share many similarities and are having to cope with similar reform pressure. However, the design of occupational pensions varies substantially. Why? In Germany, trade unions are regularly involved in occupational pension schemes and benefits are calculated on the basis of defined contributions (DC), but with minimum return guarantees preventing losses in times of financial turmoil. By contrast, trade unions rarely participate in Austrian occupational schemes. In Austria, pure DC schemes without guarantees resulted in heavy occupational pension cuts during the recent financial market crises. Following the method of difference, the article explains this difference by trade union structure, unions’ strategic thinking and (lacking) reform threats supported by employers.

A latecomer to supplementary funded pension provision, Italy’s multi-pillarisation plan was launched in the 1990s under extremely adverse conditions. Supplementary schemes were expected to achieve universal coverage relying primarily on second pillar occupational pension funds. Twenty-five years after its launch, the comprehensive plan can hardly be called successful with respect to both coverage and the relative importance of second and third pillar institutions. Extreme variation in coverage rates between occupational categories and across economic sectors suggests, however, that these developments cannot be merely interpreted as a consequence of institutional resilience and path-dependent dynamics. The article applies an ‘actor-centred institutionalist’ framework to respond to three main questions. What explains the still limited coverage of supplementary pillars in Italy? What factors account for the prominent role played by third pillar pension schemes in contrast to policy-makers’ original intentions? Which factors allow us to understand the significant variation in coverage across both occupational categories and economic sectors?

Over 3 million people in Hong Kong and 21 million people in the UK are saving for retirement under the mandatory provident fund and individual savings account schemes, respectively. Yet, we know little about how individual preferences, such as risk attitudes (risk-seeking and risk-averse) that are known to impact highly consequential decisions in a variety of real-world contexts, impact retirement investment choices. In two experimental studies (Study 1—Hong Kong sample and Study 2—United Kingdom sample), we show that personal risk attitudes were a strong predictor of the profile of retirement investment portfolios. Specially, risk-averse people allocated more of their savings to low-risk funds than risk-seeking people. The pattern of findings is consistent in both Hong Kong mandatory and the UK voluntary retirement investment schemes. These findings are considered in light of policy decisions made in Hong Kong retirement and UK pension schemes.