The appropriateness of default investment options in defined contribution plans : Australian evidence

For participants in defined contribution (DC) plans who refrain from exercising investment choice, plan contributions are invested following the default investment option of their respective plans. Since default investment options of different plans vary widely in terms of their benchmark asset allocation, the most important determinant of investment performance, participants enrolled in these options face significantly different wealth outcomes at retirement. This paper simulates the terminal wealth outcomes under different static asset allocation strategies to evaluate their relative appeal as default investment choice in DC plans. We find that strategies with low or moderate allocation to stocks are consistently outperformed in terms of upside potential of exceeding the participant’s wealth accumulation target at retirement as well as downside risk of falling below that target outcome by aggressive strategies whose allocation to stocks approach 100%. The risk of extremely adverse wealth outcomes for plan participants also does not appear to be very sensitive to asset allocation. Our evidence suggests the appropriateness of strategies heavily tilted towards stocks to be nominated as default investment options in DC plans unless plan providers emphasize predictability of wealth outcomes over adequacy of retirement wealth.

Financial literacy and pension investment decisions

The call for enhanced financial literacy amongst consumers is a global phenomenon, driven by the growing complexity of financial markets and products, and government concerns about the affordability of supporting an ageing population. Worldwide, defined benefit pensions are giving way to the risk and uncertainty of defined contribution superannuation/pension funds where fund members now make choices and decisions that were once made on their behalf. An important prerequisite for informed financial decision-making is adequate financial knowledge and skills to make competent investment decisions. This paper reports the findings of an online survey of the members of a large Australian public sector-based superannuation fund and shows that although respondents generally understand basic financial matters, on average, their understanding of investments concepts, such as the relationship between risk and returns, is inadequate. These results highlight the need for education programs focusing specifically on developing fund members’ investment knowledge and skills to facilitate informed retirement savings decisions.

CFO inside debt and corporate innovation

This thesis examines the importance of CFO incentives on the value maximization of firm. It examines the association between CFO inside debt compensation i.e., CFO pensions and deferred compensation, and investment in corporate innovation. It finds that instead of encouraging innovation, CFO inside debt appears to have a dampening effect on investment in innovation.

Investment strategies in retirees' decumulation phase

This thesis consists of three studies on investment strategies for Australian retirees. Specifically, it investigates retirees' preference between alternative drawdown strategies in the presence of government pensions, appropriate management of longevity risk through the use of deferred annuities and asset allocation in retirement. It finds drawdown strategies linked to life expectancy to be the best performers. Deferred annuities are found to improve retirement incomes for risk averse retirees. For retirees who want to meet certain wealth thresholds in retirement, equity dominated portfolios provide superior outcomes for higher threshold levels.

Disabled Revolutionary War Veterans and the Construction of Disability in the Early United States, c. 1776-1840

This thesis addresses the following broad research question: what did it mean to be a disabled Revolutionary War veteran in the early United States during the period from 1776 to roughly 1840? The study approaches the question from two angles: a state-centred one and an experiential one. In both cases, the theoretical framework employed comes from disability studies. Consequently, disability is regarded as a sociocultural phenomenon rather than a medical condition. The state-centred dimension of the study explores the meaning of disability and disabled veterans to the early American state through an examination of the major military pension laws of the period. An analysis of this legislation, particularly the invalid pension acts of 1793 and 1806, indicates that the early United States represents a key period in the development of the modern disability category. The experiential approach, in contrast, shifts the focus of attention away from the state towards the lived experiences of disabled veterans. It seeks to address the issue of whether or not the disabilities of disabled veterans had any significant material impact on their everyday lives. It does this through a comparison of the situation of 153 disabled veterans with that of an equivalent number of nondisabled veterans. The former group received invalid pensions while the latter did not. In comparing the material conditions of disabled and nondisabled veterans, a wide range of primary sources from military records to memoirs and letters are used. The most important sources in this regard are the pension application papers submitted by veterans in the early nineteenth century. These provide us with a unique insight into the everyday lives of veterans. Looking at the issue of experience through the window of the pension files reveals that there was not much difference in the broad contours of disabled and nondisabled veteran life. This finding has implications for the theorisation of disability that are highlighted and discussed in the thesis. The main themes covered in this study are: the wartime experiences of injured American soldiers, the military pension establishment of the early United States and the legal construction of disability, and the post-war working and family lives of disabled veterans. Keywords: disability, early America, veterans, military pensions, disabled people, Revolutionary War, United States, disability theory.

Predictors of disability retirement: From early intentions to retirement

The strong tendency of elderly employees to retire early and the simultaneous aging of the population have been major topics of policy and scientific debate. A key concern has been the financing of future pension schemes and possible labour shortage, especially in social and health services within the public sector. The aging of the population is inevitable, but efforts can be made to prevent or postpone early exit from the labour force, e.g., by identifying and intervening in the factors that contribute to the process of early retirement due to disability. The associations of intentions to retire early, poor mental health and different psychosocial factors with the process of disability retirement are still poorly understood. The purpose of this study was to investigate the associations of intentions to retire early, poor mental health, work and family related psychosocial factors and experiences of earlier life stages with the process of disability retirement. The data were derived from the Helsinki Health Study (HHS, N=8960) and the Health and Social Support Study (HeSSup, N=25 901). The Helsinki Health Study is an ongoing employee cohort study among middle-aged women and men. The Health and Social Support Study is an ongoing longitudinal study of a working-age sample representative of the Finnish population. The analyses were restricted to respondents 40 years of age or older. Age and gender adjusted prevalence and incidence rates were calculated. Associations were studied by using logistic, multinomial and Cox regression. Strong intentions to retire early were common among employees. Poor mental health, unfavourable working conditions and work-to-family conflicts were clearly associated with increased intentions to retire early. Strong intentions to retire early predicted disability retirement. Risk of disability retirement increased in a dose-response manner with increasing number of childhood adversities. Poor mental and somatic health, life dissatisfaction, heavy alcohol consumption, current smoking, obesity and low socioeconomic status were also predictors of disability retirement. The impact of poor mental health and adverse experiences from earlier life stages, work and family related psychosocial factors, e.g., work-family interface, the subjective experience of well-being and health related risk behaviours on the process of disability retirement should be recognised. Preventive measures against disability retirement should be launched before subjective experience of ill health, work disability and strong intentions to retire early emerge.

Hyvinvointivaltion pelastamisella huonosti voivia eläkeläisiä? – mediakeskustelua vuoden 2009 eläkeiän nostopäätöksestä

This thesis examines the media debate on pensions. The case analysed in the thesis is the debate that sharpened after the Finnish government made the decision to raise the retirement age. The analysed data consists of articles published in the printed media during one month after the decision was made on 24th of February in 2009. The aim of the study is to describe how the decision is argued about by different positions of speakers and how retirement is justified from the perspective of the individual. Furthermore, the purpose is to discover different ways of discussing the pensioner. The theoretical frame for this study is social constructivism, which understands reality as socially constructed with language. From this perspective, media texts can be seen as one form of shaping reality. The data is analysed by using different methods. Thematisation is used to discover the key topics, and quantification is used to examine the prevalence of different arguments. The method in which the speaker’s ways of speaking is analysed in different participant categories I call “a speaker position analysis”. The debate around the decision to raise the retirement age highlight the power struggle both between the government and the opposition as well as the government and employee unions. One thing all discussants agree is the need to raise the retirement age. From the individual's perspective, retirement is justified mostly with hard working conditions and inadequacy of health. The pensioner's image is appearing gloomy in most discourses. Prevailing discourses are seeing a pensioner either sick and tired or someone who is not good for work and has lost his dignity. The debate around the decision is intertwined around the concepts of welfare state and individual's well-being. In the postmodern society, human preferences are individualised. Welfare state means different things to different people, as well as the individual's subjective perception of well-being is unique. These two aspects are the ones which raise the tension in the analysed media debate.

The Impact of New Capital Requirements on the Portfolio Decisions of Finnish Pension Institutions

This paper examines the potential impact of new capital requirements on asset allocations of Finnish pension institutions. We describe the new requirements and consider portfolio construction to minimize regulatory capital, given the investor’s preferred level of expected return. Results identify portfolio transactions that enhance expected return without increasing capital needs. Regulation calls for portfolio diversification and prudence in management, but this paper shows that market participants can exploit inconsistencies in regulation. Possible future consequences include capital outflows from the pension system and an unintended decrease in pre-funding of old-age pensions.

Process of burnout: structure, antecedents, and consequences

The major changes that have been witnessed in today's workplaces are challenging the mental well-being of employed people. Stress and burnout are considered to be modern epidemics, and their importance to physical health and work ability has been acknowledged world-wide. The aim of the thesis was to study the concept of burnout as a process proceeding from its antecedents, through the development of the syndrome, and to its outcomes. Several work-related factors considered antecedents of burnout were studied in different occupational groups. The syndrome of burnout is seen as consisting of three dimensions - exhaustion, cynicism and lack of professional efficacy - and different alternatives for the sequential development of these dimensions were tested. Furthermore, several indicators of the severely detrimental health and work ability outcomes of burnout were investigated in a longitudinal study design. The research questions were as follows. 1) Is burnout, as measured with the Maslach Burnout Inventory - General Survey (MBI-GS), a three-dimensional construct and how invariant is the factorial structure across occupations (Finnish) and national samples (Finnish, Swedish and Dutch)? How persistent is exhaustion over time? 2) What is the sequential process of burnout? Is it similar across occupations? How do work stressors relate to the process? 3) How does burnout relate to severe health consequences as well as temporary and chronic work disability according to hospitalization periods, sick-leave episodes and receiving disability pensions? The data were collected between 1986 and 2005. The population of the study consisted of respondents to a company-wide questionnaire survey carried out in 1996-1997 (N=9705, response rate 63%). The participants comprised 6025 blue-collar workers and 3680 white-collar workers. The majority were men (N=7494) and the average age was 43.7 years. In addition, a sample from the population had responded to a questionnaire survey in 1988, which was combined with the 1996 data to form panel data on 713 respondents. The register-based data were collected between 1986 and 2005 from 1) the company's occupational health services' records for a sample of respondents from the 1996 questionnaire survey (sick-leave data), 2) hospitalization records from the Hospital discharge register, and 3) disability pension records from the Finnish Centre for Pensions. These data were combined person by person with the 1996 questionnaire survey data with the help of personal identification numbers which were saved with the study numbers by the researchers. The results showed that burnout consists of three separate but correlating symptoms: exhaustion, cynicism and lack of professional efficacy. As a syndrome, burnout was strongly related to job stressors at work, and seemed to develop from exhaustion through cynicism to lack of professional efficacy in a similar manner among white-collar and blue-collar employees. The results also showed that exhaustion persisted even after eight years of follow-up but did not predict cynicism or lack of professional efficacy after that amount of time. Nor were job stressors longitudinally related to burnout. Longitudinal results were obtained for the severe health-related consequences of burnout. The investigated outcomes represented different phases of health deterioration ranging from sick-leaves and hospitalization periods to receiving work disability pensions. The results showed that burnout syndrome, and its elements of exhaustion and cynicism, were related to future mental and cardiovascular disorders as indicated by hospitalization periods. Burnout was also related to future sick-leave periods due to mental, cardiovascular and musculoskeletal disorders. Of the separate elements, exhaustion was related to the same three categories of disorder, cynicism to mental, musculoskeletal and digestive disorders, and lack of professional efficacy to mental and musculoskeletal disorders. Burnout also predicted receiving disability pensions due to mental and musculoskeletal disorders among initially healthy subjects. Exhaustion was related to receiving disability pensions even when self-reported chronic illness was taken into account. The results suggest that burnout is a multidimensional, chronic, work-related syndrome, which may have serious consequences for health and work ability.

Substance misuse problems during pregnancy with special emphasis on buprenorphine

Maternal drug abuse during pregnancy endangers the future health and wellbeing of the infant and growing child. On the other hand, via maternal abstinence, these problems would never occur; so the problems would be totally preventable. Buprenorphine is widely used in opioid maintenance treatment as a substitute medication. In Finland, during 2000 s buprenorphine misuse has steadily increased. In 2009 almost one third of clientele of substance treatment units were in treatment because of buprenorphine dependence. At Helsinki Women s Clinic the first child with prenatal buprenorphine exposure was born in 2001. During 1992-2001 in the three capital area maternity hospitals (Women s clinic, Maternity hospital, Jorvi hospital) 524 women were followed at special antenatal clinics due to substance abuse problems. Three control women were drawn from birth register to each case woman and matched for parity and same place and date of the index birth. According to register data mortality rate was 38-fold higher among cases than controls within 6-15 years after index birth. Especially, the risk for violent or accidental death was increased. The women with substance misuse problems had also elevated risk for viral hepatitis and psychiatric morbidity. They were more often reimbursed for psychopharmaceuticals. Disability pensions and rehabilitation allowances were more often granted to cases than controls. In total 626 children were born from these pregnancies. According to register data 38% of these children were placed in out-of-home care as part of child protection services by the age of two years, and half of them by the age of 12 years, the median follow-up time was 5.8 years. The risk for out-of-home care was associated with factors identifiable during the pre- and perinatal period. In 2002-2005 67 pregnant women with buprenorphine dependence were followed up at the Helsinki University Hospital, Department of Obstetrics and Gynecology. Their pregnancies were uneventful. The prematurity rate was similar and there were no more major anomalies compared to the national statistics. The neonates were lighter compared to the national statistics. They were also born in good condition, with no perinatal hypoxia as defined by standard clinical parameters or certain biochemical markers in the cord blood: erythropoietin, S100 and cardiac troponin-t. Almost 80% of newborns developed neonatal abstinence syndrome (NAS) and two third of them needed morphine medication for it. Maternal smoking over ten cigarettes per day aggravated and benzodiazepine use attenuated NAS. An infant s highest urinary norbuprenorphine concentration during their first 3 days of life correlated with the duration of morphine treatment. The average length of infant s hospital stay was 25 days.

Leisure-time physical activity, health related functioning and retirement : a prospective cohort study among middle-aged employees

Physical inactivity has become a major threat to public health worldwide. The Finnish health and welfare policies emphasize that the working population should maintain good health and functioning until their normal retirement age and remain in good health and independence later in life. Health behaviours like physical activity potentially play an important role in reaching this target as physical activity contributes to better physical fitness and to reduced risk of major chronic diseases. The aim of this study was to examine first whether the volume and intensity of leisure-time physical activity impacts on subsequent physical health functioning, sickness absence and disability retirement. The second aim was to examine changes in leisure-time physical activity of moderate and vigorous intensity after transition to retirement. This study is part of the ongoing Helsinki Health Study. The baseline data were collected by questionnaires in 2000 - 02 among the employees of the City of Helsinki aged 40 to 60. The follow-up survey data were collected in 2007. Data on sickness absence were obtained from the employer s (City of Helsinki) sickness absence registers and pension data were obtained from the Finnish Centre for Pensions. Leisure-time physical activity was measured in four grades of intensity and classified according to physical activity recommendations considering both the volume and intensity of physical activity. Statistical techniques including analysis of covariance, logistic regression, Cox proportional hazards models and Poisson regression were used. Employees who were vigorously active during leisure time especially had better physical health functioning than those physically inactive. High physical activity in particular contributed to the maintenance of good physical health functioning. High physical activity also reduced the risk of subsequent sickness absences as well as the risk of all-cause disability retirement and retirement due to musculoskeletal and mental causes. Among those transferred to old-age retirement moderate-intensity leisure-time physical activity increased on average by more than half an hour per week and in addition the occurrence of physical inactivity reduced. Such changes were not observed among those remained employed and those transferred to disability retirement. This prospective cohort study provided novel results on the effects of leisure-time physical activity on health related functioning and changes in leisure-time physical activity after retirement. Although the benefits of moderate-intensity physical activity for health are well known these results suggest the importance of vigorous physical activity for subsequent health related functioning. Thus vigorous physical activity to enhance fitness should be given more emphasis from a public health perspective. In addition, physical activity should be encouraged among those who are about to retire.

Social Security, Education, Retirement and Growth

In this paper we analyze the effects of social security policies in an unfunded, earnings-related social security system on the incentives to education investment and voluntary retirement, on growth and on income inequality. Growth is endogenously driven by human capital investment, individuals differ in their innate (learning) ability at birth, and the pension scheme includes a minimum pension. More skilled individuals spend more on education, minimum pensions reduce low skill individuals' incentives to invest in human capital, there is no monotonic relationship between per capita growth and income inequality.

Life Expectancy, Human Capital, Social Security and Growth

Revised: 2006-11.-- Published as an article in: Journal of Public Economics 90(12), December, 2006, pp. 2323-2349.

Evolución de las políticas de ayuda a la vivienda en España.

En el presente trabajo se estudia la evolución del gasto público en la política de vivienda en España. La política de vivienda constituye una parte más de la Economía del Bienestar, aunque no ha recibido la misma atención que otros de sus componentes, como la salud, la educación o las pensiones. Comenzaremos situando a España en el contexto europeo y observaremos como los efectos de la crisis internacional han afectado de manera significativa a las partidas de gasto de este bien. Conoceremos cuáles son los principales objetivos e instrumentos de la política de vivienda en España y analizaremos la evolución de la misma. De este modo, se detallarán los Planes de Vivienda que se han ido elaborando desde comienzos del siglo XX hasta nuestros días. A continuación, evaluaremos la situación en la que nos encontramos en base a algunas características del mercado de vivienda. Para finalizar, se cierra el trabajo estableciendo una serie de conclusiones breves y unas posibles propuestas de mejora o posibles caminos a seguir.

Ongizate estatua kolokan Espainian : pentsioen erreformak

This paper analyzes the pensions reforms and changes that have been in Spain to guarantee Welfare State. In fact, pensions are the most important part that we have to control in order to satisfy the necessities of a country: who and what conditions in we have to receive them, what have to be the financial source or sources etcetera. Because of that, this paper summarizes the reforms have been until nowadays, what are the reasons of these changes and what have been the impacts as much on workers as on pensioners. Apart from that, we are going to analyze the factor to cause gender differences. Finally, it suggests some restraints that the state must to impose in the medium term to remove unfair elements that the last reform causes and to guarantee solvency in the long term.