The Pension Research Council of The Wharton School of the University of Pennsylvania is committed to generating debate on key policy issues affecting pensions and other employee benefits. We sponsor interdisciplinary research on the entire range of private pension and social security programs, as well as related benefit plans in the United States and around the world.
PublicationChanging Risks Confronting Pension Participants(2005-01-01) Borzi, Phyllis CThe past decade has seen a shift from traditional employer-sponsored defined benefit pensions toward individual account defined contribution plans. This has profound implications for participants’ retirement security, as it involves a reallocation of risks and rewards from the plan sponsor to the employee. While much has been written about the transfer of investment risk and the potential consequences of bad investment choices, less attention has been focused on other potential hazards to retirement security. These include the effect of job changes and other employment factors on contribution patterns, the chance of outliving one’s accumulated assets, and the tension between encouraging participants to save for retirement while allowing access to those assets for a variety of other pressing financial needs. This chapter examines these challenges to participant retirement income security and identifies several legal and policy changes that might enable participants to cope better with such changes. PublicationA Fresh Look at Defined Benefit Plans: An Employer Perspective(1995) Twinney, Marc M. PublicationReforms to Canadian Social Security, 1996-7(2008-01-01) Brown, Robert L. PublicationHow Will Persistent Low Expected Returns Shape Household Economic Behavior?(2018-10-02) Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia SMany believe that global capital markets will generate lower returns in the future versus the past. We examine how persistently lower real returns will reshape work, retirement, saving, and investment behavior of older persons using a calibrated dynamic life cycle model. In a low return regime, workers build up less wealth in their tax-qualified 401(k) accounts versus the past, claim social security benefits later, and work more. Moreover, the better-educated are more sensitive to real interest rate changes, and the least-educated alter their behavior less. Interestingly, wealth inequality is lower in periods of persistent low expected returns. PublicationLearning and Confirmation Bias: Measuring the Impact of First Impressions and Ambiguous Signals(2018-08-01) Agnew, Julie; Bateman, Hazel; Eckert, Christine; Iskhakov, Fedor; Louviere, Jordan; Thorp, SusanWe quantify the widespread and significant economic impact of first impressions and confirmation bias in the financial advice market. We use a theoretical learning model and new experimental data to measure how these biases can evolve over time and change clients’ willingness to pay advisers. Our model demonstrates that clients’ confirmation bias will reinforce the effect of first impressions. Our results also lend support, in a new financial context, to theoretical models of learning under limited memory where people use unclear signals to confirm and reinforce their current beliefs. We find that almost two thirds of the participants in our experiment make choices that are consistent with a limited memory updating process: they interpret unclear advice to be good advice when it comes from the adviser they prefer. Our results show that models that account for behavioral factorssuch as confirmation bias may be needed to explain some financial decisions. PublicationOverview: Lessons from Pension Reform in the Americas(2006-01-01) Kay, Stephen J.; Sinha, Tapen PublicationPublic-Private Partnerships Extend Community-based Organization’s Longevity(2020-07-22) Dionne, William J.; Guishard, DozenePublic/private partnerships are essential to the survival of mission-driven non-profits, especially those in aging services. Aging service nonprofits receive less than two percent of all institutional philanthropic dollars, with a largest segment of their funding provided by government entities. Carter Burden Network (CBN) is an aging services nonprofit organization serving community-dwelling seniors in Manhattan, with a concentration of services in East Harlem, Roosevelt Island, and the Upper East Side. The NYC Department for the Aging and other government sources provide 50 percent of CBN’s budget. The adage that ‘government cannot do it alone’ is exemplified through CBN’s history of developing new programs through private partnerships, and use of skills-based volunteerism to enhance services. Public/private partnerships have helped CBN strengthen its capacity to expand its service provision and areas. Equally important is CBN’s commitment to increase return on investment for public/private partnerships by reducing food insecurity and malnutrition, hospitalization, and social isolation - all with a financial benefit to the broader society. PublicationFactors Affecting Temporal Discounting in Older Adults(2019-01-31) Kable, Joseph W; Lempert, Karolina; Wolk, DavidWhile most people discount future rewards and consequences to at least some extent, the degree of temporal discounting varies widely from person to person. These individual differences, in turn, are associated with a host of risky behaviors, such as smoking, overeating, gambling, borrowing excessively on credit cards and texting while driving. This study looks at the cognitive and neural mechanisms underlying temporal discounting, so more targeted interventions can be developed to minimize its harmful effects. PublicationState Employee Pension Plans(1999) Steffen, Karen I PublicationImplications of Pension Plan Features, Information, and Social Interactions for Retirement Saving Decisions(2003-01-01) Duflo, Esther; Saez, EmmanuelThis chapter summarizes key findings from experimental or quasi-experimental studies on the determinants of savings through employer-sponsored retirement benefits plans. Research shows that default rules and the ability to commit now for the future can have a dramatic impact on enrollment rates. Analysis also shows that enrollment decisions can be influenced by peer decisions, as well as information provided by the employer. We also identify gaps in existing knowledge and propose new randomized experiments which could be conducted in the workplace that would fill important gaps in our understanding of the determinants of retirement savings.