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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 main purpose of this study is to measure financial literacy of individual pension system customers in Ankara and to find out factors affecting financial literacy while acquiring additional information on financial decisions of individual pension system customers. The results show that the self-financial knowledge evaluation of individual pension system customers and their financial literacy are not compatible. Besides, the financial literacy levels of the customers who make their investment themselves and customers who leave investment decision to the individual pension system company are found not to be statistically significant although self-investors believe they have higher financial knowledge. In addition to this, the effects of financial literacy level in terms of renewable energy investments are also evaluated. Individuals with an increasing level of financial literacy may turn to renewable energy sources and investments because of their low-cost and high-return potential.

Since SESIM is of a fundamental importance for this analysis, we also give a short presentation of the income-generating mechanisms in the model, focusing on earnings and income from capital.

Although tax relief on pensions is a controversial area of government expenditure, this is the first study of the tax effects for a real-world defined benefit pension scheme. First, we estimate the tax and national insurance contribution (NIC) effects of the scheme's change from final salary to career average revalued earnings (CARE) in 2011 on the gross and net wealth of the sponsor, government, and 16 age cohorts of members, deferred pensioners, and pensioners. Second, we measure the size of the twelve income tax and NIC payments and reliefs for new members and the sponsor, before and after the rule changes. We find the total subsidy split is roughly 40% income tax subsidy and 60% NIC subsidy. If lower tax rates in retirement and the risk premium effect of the exempt-exempt-taxed (EET) system are not viewed as a tax subsidy, the tax subsidy to members largely disappears. Any remaining subsidy drops, as a proportion of pension benefits, for high earners, as does that for NICs.

We develop a model to estimate salary-based premiums for pension benefit guarantees by simultaneously considering a stochastic interest rate and three practical pension plan termination conditions. We show the relationship among premium rates, a plan’s funding level, sponsoring firm’s capital position, early lapse, and a participant’s years of service. We also show how the regulatory intervention policy interacts with a plan’s funding level and a sponsor’s capital position and how it affects the pension insurance cost.

In this article we investigate the impact of the 1996 pension crisis in Russia on several measures of subjective well-being (SWB). Using a difference-in-difference strategy and an individual fixed-effects model, we find that an exogenous shock to the redistribution system has a significant negative effect on the SWB of pensioners who fail to receive their pensions. The effect differs across aspects of life evaluation; the shock has a significant negative effect on current life satisfaction (LS), whereas it has no effect on self-assessed health. The effect of the shock extends to non-pensioners who live with pensioners in arrears: they experience an equally strong and significant decline in LS even after accounting for personal income. In addition, we find that the pension crisis leads pensioner households to neither receive more nor send less money to extended family, thus leaving these households to bear alone the entire monetary cost. Lastly, we find suggestive evidence that the crisis, despite being a purely monetary shock, affects well-being in ways that go beyond the monetary size of pension loss. Policies aimed to fully compensate for such disruptions in the redistribution system would need to take these externalities into account.

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.

We discuss workforce management, related to those aged 50+ , in the United Kingdom and the Republic of Korea. With international competitiveness becoming increasingly crucial, retaining the ‘right’ mix of employees to achieve strategic organisational goals is likely to determine organisational success. However, we argue that workforce management is not only influenced by organisational-level strategy but also by national institutional and sectoral policies. Decisions on whether and how to retain older workers are therefore (co-)determined by institutional incentives and barriers to doing so.

We find that British and Korean governments have legislated in favour of extended working lives and, hence, the retention of ageing workforces. In the United Kingdom, pension eligibility ages are being increased and in Korea mandatory retirement age has been raised to age 60. While changes to the UK pension systems leave individuals with the (financial) risks associated with extended working lives, the Korean government tries to protect individuals from financial hardship by enabling them to remain longer in their primary career. However, whether and how government regulation plays out depends on how organisations react to it. The Korean discussion, in fact, shows that there might be leeway: organisations might continue to externalise their employees early framed as honourable, or voluntary, early retirement, which might not be in the interest of the individual but very much in the interest of the organisation. It therefore appears as if the retention of ageing staff is not (yet) considered to be of strategic importance by many organisations in these countries.

Given the ongoing attention surrounding public sector defined benefit pensions, the participating plan sponsors such as local units of government may be tempted to reduce their future pension liabilities, possibly at the expense of their former employees. Alternatively, public sector employees may act to withdraw their pension contributions if they have concerns related to the sustainability of their employer's pension plan. Nonvested, terminated employees have the option of leaving their contributions on account or taking them as a distribution in the form of a rollover to a qualifying retirement account, or a cash-out. Because a cash distribution carries with it the potential for retirement savings ‘leakage,’ it continues to be of public concern.

This study contributes to the literature by examining determinants of the distribution decisions of terminated employees and is first to specifically explore the association of pension funding levels as a determinant of such decision. Decisions of 46,608 employees who separated employment between 2010 and 2013 were examined. The results suggest that a decrease in the employer's pension funding is associated with increased probability that the terminated employee will take a refund of their contributions. Additionally, the data reveal that 88% of the terminating employees who took a refund requested to receive it in the form of a cash-out, totaling about $38 million of cash distributions. Lastly, about 1,000 of those employees each cashed out more than $8,000, thus suggesting the pension leakage problem warrants further research and perhaps policy changes.

In the 1990s, individuals aged 18–64 were eligible for disability insurance, if their work capacity was reduced by at least 25 percent (50 percent before 1993). In the beginning of the period, before 1991, disability insurance could also be granted for labor market reasons (i.e., if unemployed had been compensated long enough to exhaust their benefits – obtained benefits for 300 days). This possibility was gradually phased out after 1991. In 1995, the enforcement of the rules was tightened. When evaluating applications for disability pensions, local insurance offices now had to request a medical certificate and a work-related test of the applicant's degree of work capacity. Local offices also had to consult the applicant's employer, physician, or other qualified personnel, and even pay personal visits to the applicant. The possibilities for rehabilitating the applicant should also be investigated. From 1997, work incapacity should be evaluated in relation to all possible employment opportunities. Potential income changes resulting from changes in employment should not affect the evaluation⁴ (National Social Insurance Board, 2005).