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The authors herein carry out a literature review of retirement planning and highlights that proper retirement planning starts by looking at the level of income an individual is likely to continue receiving at retirement if they were to take no action, then comparing this to what they would need to lead the lifestyle they desire. The authors review the traditional economic theories that many are accustomed to when interpreting financial matters (i.e., rational behavior) and compares this to the various studies and articles found in literature. The authors then dig into retirement planning in Malta and the behavioral obstacles to proper planning and how these are tackled in different European countries.

The funding of defined-benefit plans has garnered the attention of academicians, practitioners, and policymakers. Drawing upon agency and organizational control theories, this study investigates the implications of board independence on changes in defined-benefit funding. Using a panel dataset of S&P 500 companies sponsoring defined-benefit plans, the author finds that corporate boards matter. Specifically, CEO duality and outside director representation are associated with year-to-year decreases in defined-benefit funding. Conversely, outside director ownership is related to year-to-year increases in defined-benefit funding. Furthermore, outside director ownership moderated the relationship between outside director representation and defined-benefit funding such that outside director representation is associated with year-to-year increases in defined-benefit plan funding when the percentage of outside director ownership is high.

It is well established that Black and Hispanic workers accumulate leszs wealth for retirement than white workers. This study provides evidence on whether racial and ethnic differences in private pension coverage and benefit levels contribute to the wealth differentials. Using data from the Current Population Survey, Survey of Consumer Finances and the Health and Retirement Survey, several consistent findings emerge. First, most of the racial and ethnic differences in pension benefit levels are accounted for by differences in worker charateristics. Second, among workers who are covered by a private pension, racial and ethnic differences in pension asset accumulation are quite small. Finally, exclusion of pension wealth has a small effect on the comparison of average levels of wealth across racial and ethnic groups, but has a substantial effect for comparisons at the bottom of the wealth distribution. Overall, the findings suggest that, holding worker characteristics constant, minority and majority workers accumulate very similar levels of wealth.

Using UK survey data on labour force participation and earnings and a model developed by the Department for Work and Pensions, I describe the unique challenges women face in accruing private pension benefits and simulate likely outcomes for women under the Government's proposed system of personal accounts. Projections of savings in personal accounts for male and female full-time median earners with the same work histories reveal that women would have about 27 per cent less savings available for retirement due to their lower earnings. This gap would grow, to 31 per cent, upon annuititization because single-sex annuity rates are used. Additional modifications that take into account typical work patterns of women, such as extended periods of part-time work, further reduce the savings they would accumulate in personal accounts. Several key policy provisions could improve outcomes for women including allowing spousal contributions and requiring joint-life or unisex annuities.

Using a population study, we provide evidence on the important but understudied issue of company survival under employee ownership, as well as on the performance effects of employee ownership and the issue of whether employee ownership substitutes for other pension benefits.

Company survival and pension benefits are assessed using a unique dataset from Dun & Bradstreet of privately held Employee Stock Ownership Plan (ESOP) companies over the 1988–1999 period, matched to non-ESOP companies in the same industry. Performance is assessed using pre/post-comparisons of ESOP adopters in the 1988–1994 period.

Privately held ESOP companies in 1988 were only half as likely as non-ESOP firms to go bankrupt or close over the 1988–1999 period, and only three-fifths as likely to disappear for any reason. The ESOP companies had significantly higher post-adoption annual employment and sales growth, along with higher sales per employee. ESOP companies are four times more likely than their non-ESOP pairs to have defined benefit pension plan and other forms of defined contribution plans.

The greater survival was not explained by higher productivity, or by greater compensation flexibility. The higher survival may instead be tied to complementary policies adopted along with ESOPs to create a more committed and engaged workforce that contributes ideas to enhance survival and is more flexible when economic difficulties arise. The pension results are consistent with other studies on compensation under employee ownership, suggesting that employee ownership is generally used as a form of efficiency wage to provide above-market compensation.

Higher survival among ESOP companies could result in lower job loss and unemployment, potentially providing a public policy rationale for support of employee ownership.

The chapter provides the first examination of company survival in privately held ESOP companies, and one of the few examinations of how ESOPs relate to other pension benefits.

The transition from large to small working age cohorts and perpetually increasing longevity presents major challenges to pension systems around the world. In this context, the Danish system has been highlighted as particularly adequate and sustainable, although often developed more as element in macro-economic and fiscal policies than pension visions and certainly enabled and bolstered through other policies, such as fixed exchange rates, debt reduction, wage restraint, employment maximation and tax reform. The combined effect of six distinctive pension policy features places Danish pensions in the super-league of national systems: (1) a generous minimum pension providing all residents with basic old age security; (2) progressive redistribution resulting from the integration of public and private pension benefits; (3) high occupational pension coverage, with sizable contributions offering immediate membership, vesting and full portability of rights; (4) the tax regime, where investment return taxation substantially reduces the fiscal pressure from tax-exempting gross income in the build-up period and deferral of income tax until benefits are paid out, secures a revenue windfall at the height of ageing; (5) the linking of pensionable ages to life expectancy, which aims to lower pension costs, increases labour supply, growth and tax revenue and (6) the regime for third pillar schemes preventing their use in tax planning. Although the Danish pension experience has its obvious peculiarities, lessons for other governments can be found in the public‒private benefit integration, the tax regime, the life expectancy indexing of pensionable ages and the use of pensions in economic policies.

Using data from the Health and Retirement Study, we examine behavioral responses to a new generation of retirement policies that on average are actuarially neutral. Although many conventional models predict that actuarially neutral policies will not affect retirement behavior, our model allows those with high-time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits. Thus together with liquidity constraints facing those with high-time preference, we find that actuarially neutral policies do affect retirement behavior. One such policy follows on the elimination of the Social Security earnings test for those over normal retirement age, and would eliminate the earnings test between early and normal retirement age. Another of these policies would increase the ages of benefit entitlement. Still another such policy emerges from a central focus of the past few years on the adoption of personal accounts. Although Social Security benefits are currently paid in the form of an annuity, benefits from either defined benefit plans or from personal accounts may be made available as an annuity or as a lump sum of equivalent actuarial value. A related policy choice between actuarially equivalent benefits emerges on the pension side. There has been discussion of relaxing the current IRS prohibition against paying a pension benefit when a person remains at work, instead allowing partial pension benefits to be paid to those who partially retire on a job.

Financing retirement is an important aspect of later life that is related to overall healthy living and wellbeing. Very little is known about the attitudes of people towards their individual future retirement plans, accrued savings or even finances once they are into old age. There are no comparative studies across geographical regions that may help with understanding the complex behaviour of individuals and social norms. This chapter examines how life in retirement in the United Kingdom and Hong Kong is financed while also capturing regional disparities. This study uses data collected from primary sources in both territories. Quantitative analysis was carried out in order to answer key research questions. The findings suggest that employees plan to work longer than their actual retirement age and are not prepared for retirement whereas educated and higher income groups generally have savings plans in place to finance their later lives. These findings have significant implications for organisations and policy makers.