Koh, Benedict SK
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Publication Collective Investments for Pension Saving: Lessons from Singapore’s Central Provident Fund Scheme(2010-01-01) Koh, Benedict SK; Mitchell, Olivia S; Fong, Joelle HYSingapore’s mandatory national defined contribution pension system permits participants to invest their retirement savings in a wide range of investment instruments if they wish, rather than leaving their savings in CPF accounts to earn interest rate by default. This paper asks whether workers seeking to earn higher returns can expect to do better than the CPF-managed default, by moving their money into professionally-managed unit trusts. We use historical data to investigate whether fund managers possess superior stock-picking and market-timing skills, as well as whether they exhibit persistence in performance and offer diversification benefits to participants. The evidence is mixed, which could explain why so few participants opt out of the CPF-run default fund.Publication Singapore’s Social Security Savings System: A Review and Some Lessons for the United States(2014-09-01) Koh, Benedict SKUnlike the defined benefit system adopted by the United States, Singapore operates a defined contribution system administered by the Central Provident Fund (CPF). When originally conceived, CPF’s main goal was to help citizens save for retirement. However, over the years, it has evolved into a comprehensive system with multi-faceted objectives: saving for retirement, home ownership, healthcare, financial protection, and asset enhancement. While regarded as generally successful, the CPF has been criticized recently for not achieving retirement adequacy. This chapter reviews the key features of Singapore’s social security savings system and suggests some reforms to enhance retirement security for its members.Publication Does Financial Education Enhance Financial Preparedness? Evidence from a Field Experiment in Singapore(2014-09-01) Barua, Rashmi; Koh, Benedict; Mitchell, Olivia SWe evaluate how financial education provided to college students influenced their financial knowledge and planning in an experimental setting where we control for student motivation to enroll in the course. Using a differences-in-differences strategy, we confirm that financial education led to an increase in financial knowledge and planning. Specifically, we find that financial education improved students’ financial knowledge score by 11%, and financial planning score by 16%. No statistically significant effects are detected for students’ levels of financial prudence or discipline.Publication Functional Disabilities and Nursing Home Admittance(2012-09-01) Fong, Joelle H; Koh, Benedict SK; Mitchell, Olivia SThis paper examines how inability to perform activities of daily living relates to the risk of nursing home admission over older adults’ life courses. Using longitudinal data on persons over age 50 from the Health and Retirement Study, we show that aging one year boosts the probability of having two or more disabilities by 9 to 12 percent in a multivariate logistic model. Moreover, at least three-fifths of all 65-year-old men and three-quarters of women will experience disability levels during their remaining lifetimes severe enough to trigger nursing home admission. Our analysis also suggests that certain types of disability are more important than others in predicting nursing home admittance and use, which has implications for the design and benefit triggers for long-term care insurance programs.Publication Developments in Mandatory Defined Contribution Plans: Investment Patterns in Singapore’s Central Provident Fund System(2006-09-01) Koh, Benedict S.K.; Mitchell, Olivia S; Tanuwidjaja, TotoRising elderly life expectancies imply the need for more saving throughout the Asia-Pacific region. This paper investigates the role of recent changes in the investment offerings of the Singaporean Central Provident Fund (CPF) in this process. Our research explores investment patterns of CPF participants and comments on alternative paths for retirement system redesign.Publication What’s on the Menu? Included versus Excluded Investment Funds for Singapore’s Central Provident Fund Investors(2010-08-01) Koh, Benedict SK; Mitchell, Olivia SPublication Financial Knowledge and Portfolio Complexity in Singapore(2018-11-14) Koh, Benedict S. K; Mitchell, Olivia S; Rohwedder, SusannFinancial literacy in Singapore has not been analyzed in much detail, despite the fact that this is one of the world’s most rapidly aging nations. Using the Singapore Life Panel®, we explore older Singaporeans’ levels of financial knowledge and compare them to those observed in the United States. We assess portfolio complexity for these older households, to examine how financial literacy is related to outcomes of interest. We show that older Singaporeans’ levels of financial literacy are comparable overall to those in the United States, even though older Singaporeans score slightly lower on some dimensions (knowledge of interest and inflation), and slightly higher on their knowledge of risk diversification. We document that women are less informed than men about stock diversification, and educated people tend to be more financially knowledgeable than their less educated counterparts. We also find that financial literacy is positively associated with respondents having both more wealth and more diversified and complex portfolios.Publication Longevity Risk Management in Singapore’s National Pension System(2010-07-01) Fong, Joelle HY; Koh, Benedict SK; Mitchell, Olivia SAlthough annuities are a theoretically appealing way to manage longevity risk, in the real world relatively few consumers purchase them at retirement. To counteract the possibility of retirees outliving their assets, Singapore’s Central Provident Fund, a national defined contribution pension scheme, has recently mandated annuitization of workers’ retirement assets. More significantly, the government has entered the insurance market as a public-sector provider for such annuities. This paper evaluates the money’s worth of life annuities and discusses the impact of the government mandate and its role as an annuity provider on the insurance market.