The German model of risk distribution in supplementary occupational pensions

Burger, Csaba; Clark, Gordon L.

doi:10.21314/jor.2011.224

Cited by 6 publications

(5 citation statements)

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“…The transition from defined benefit (DB) to defined contribution (DC) workplace retirement savings plans in Anglo-American countries has expanded markedly over the past two decades, and has accelerated since the onset of the global financial crisis. Whether the product of long-term changes in industry structure and workforce composition (as in the US ; see Munnell, 2006), the establishment of regulatory frameworks aimed at promoting workplace savings plans (as in Australia ; see Mackenzie, 2010), or the implosion of employer commitment to DB retirement savings plans (as in the UK ; see Clark and Monk, 2007), the DC model increasingly holds sway with implications for many other countries (as in Germany ; see Burger and Clark, 2011). One important difference between DB and DC retirement savings plans is the fact that the risks associated with the ultimate value of workers ' retirement savings 'pot ' are borne by the employer in DB plans and the employee in DC plans (although in the case of DB plans employer bankruptcy may lead to ' risksharing' by administrative fiat or by default).…”

Section: Introductionmentioning

confidence: 99%

Pension plan participant choice: Evidence on defined benefit and defined contribution preferences

Gerrans

Clark

2013

Journal of Pension Economics and Finance

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We report analysis of voluntary switching from defined benefit (DB) to defined contribution (DC) plans in an environment best characterised as benign. Using a large Australian fund database we identify socio-demographic correlates and the macroeconomic circumstances associated with DB to DC switching. The age of participants is an important correlate of switching behaviour, suggesting a degree of risk tolerance previously not recognised in the literature. It is also noted, however, that this type of switching behaviour may involve secondary behaviour such that uncertainties of DC investment performance are managed by reference to an asset allocation formula that maps to the previous DB investment strategy.

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Section: Introductionmentioning

confidence: 99%

Pension plan participant choice: Evidence on defined benefit and defined contribution preferences

Gerrans

Clark

2013

Journal of Pension Economics and Finance

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“…To illustrate the logic behind the testing of financial literacy, in this article I refer to Burger and Clark's (; hereafter “our study”) unpublished survey of participants in Germany's largest industry‐based, multiemployer Riester occupational pension scheme. MetallRente provides third‐party options for investing modest tax‐preferred employer and employee contributions in a suite of retirement savings and investment products.…”

Section: Testing Financial Literacymentioning

confidence: 99%

“…If associated with Anglo‐American societies, recent European pension and labor market reforms have also required ordinary citizens to assume greater responsibility for their long‐term well‐being (Clark ). This situation is particularly apparent in Germany (see Burger and Clark on the consequences of labor market and pension reforms in the first decade of the twenty‐first century). The very idea of financial literacy is contested by those who decry financialization.…”

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confidence: 99%

Roepke Lecture in Economic Geography—Financial Literacy in Context

Clark

2014

Economic Geography

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Financial literacy has caught the attention of policy makers around the world. A major research program has been initiated by the World Bank aimed at mapping patterns of financial literacy in developed and developing economies. In this article, I explain the conceptual foundations of the literacy project, develop a critique of its testing procedures, and suggest that, at the limit, it is an impossible project. At every turn, standard tests of financial literacy dissolve into spatially and temporally specific phenomena that undercut the possibility of shared interpretations of notionally common problems. Nonetheless, the literacy mapping project is important for what it reveals about the geographic and sociodemographic patterns of financial knowledge. My research on financial decision making has been based, in part, on a concern for the nature and scope of financial knowledge and understanding in the context of risk and uncertainty. Thus, the trick is to anchor financial literacy programs in ways that are relevant to everyday life. These arguments are illustrated with reference to the relevant literature, published and unpublished research on financial literacy among German residents, and an innovative financial literacy program that is fine‐tuned to people's circumstances.

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“…To the extent that Lusardi and Mitchell's tests of fi nancial literacy represent agents' scope of financial knowledge and understanding, it is likely that the uptake of retail investment products would vary considerably by region. Recognizing this possibil ity, the retail investment industry may well concen trate their sales efforts on Region A (which appears to be the case in Germany; see Burger 2011;Burger and Clark 2011).…”

Section: Spatial Differentiationmentioning

confidence: 99%

“…Even so, it is apparent that there are discernible patterns in successful test "performance" relating to socio-demographic status and regions of residence. In this article, the focus is upon how we might con ceptualize maps of financial literacy and behav iour, relying in part upon recent findings from the financial literacy research programme and related research in the UK and Germany (Burger 2011;Burger and Clark 2011). Throughout, I am con cerned with what people know, how people make choices between various options, and the role of the environment in framing or prompting individual be haviour.…”

Section: Introductionmentioning

confidence: 99%

Mapping financial literacy: cognition and the environment

Clark¹

2013

Geografiska Annaler: Series B, Human Geography

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Recent research suggests that regions can be characterized according to their (more or less) financial literacy. One implication is that there may be regional ecologies of finance nested within national institutions and global markets. This article begins by situating behaviour in time and space, linking behaviour to the interaction between cognition and the environment. This is followed by a substantive account of the geographical scale of the “environment” working from the global to the local and in return from the local to the global. By implication, maps of financial literacy reflect the skills and expertise of resident populations, affecting how they sort amongst the relevant information to make effective decisions (which have a material effect on their long‐term welfare). Explaining how and why this is the case is one goal of the article. It is also acknowledged that representing the relationship between behaviour and the environment is conceptually and empirically challenging. Reference is made to new findings about the ways in which people “sample” the world around them, suggesting that cognition and the environment are intertwined in ways that may reinforce existing urban and regional inequalities. In conclusion, implications are drawn for the design and implementation of pension and retirement saving policies.

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The German model of risk distribution in supplementary occupational pensions

Cited by 6 publications

References 0 publications

Pension plan participant choice: Evidence on defined benefit and defined contribution preferences

Pension plan participant choice: Evidence on defined benefit and defined contribution preferences

Roepke Lecture in Economic Geography—Financial Literacy in Context

Mapping financial literacy: cognition and the environment

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