scholarly journals Behind the Success of Dominated Personal Pension Plans: Sales Force and Financial Literacy Factors

2019 ◽  
Author(s):  
Giuseppe Marotta
Keyword(s):  
Financial Literacy ◽  
Sales Force ◽  
Pension Plans

scholarly journals Behind the success of dominated personal pension plans: sales force and financial literacy factors

2019 ◽  
Vol 19 (4) ◽  
pp. 532-547
Author(s):  
Giuseppe Marotta
Keyword(s):  
Financial Literacy ◽  
Pension System ◽  
Debt Crisis ◽  
Explanatory Power ◽  
Revealed Preference ◽  
Sales Force ◽  
Pension Plans ◽  
Time Interval ◽  
System Reform ◽  
Supporting Evidence

AbstractThe revealed preference for dominated insurance-based personal pension plans (PPPs) in Italy is a decade-long puzzle. I surmise that a motivation from the supply side is a sales force factor deriving from the geographical distribution of financial providers, including the countrywide network of the state controlled Post Office. I provide supporting evidence using three biennial waves of the Bank of Italy's survey on household finances from 2010 to 2014. The time interval includes a public pension system reform sharply raising the statutory age retirement, legislated in December 2011 to defuse a sovereign debt crisis. I show that the salience effect on the awareness of the benefits of supplementing lower perspective public pensions with PPPs increased the explanatory power of financial strength indicators. Exploiting a module in the 2010 wave I estimate a surprising decrease in the probability of subscription to PPPs in 2014 associated with the indicator for the highest financial literacy level.

scholarly journals The language of numbers

AILA Review ◽  
2018 ◽  
Vol 31 ◽  
pp. 81-112
Author(s):  
Marlies Whitehouse
Keyword(s):  
Financial Literacy ◽  
Financial Analysts ◽  
Pension Plans ◽  
Cyclic Process ◽  
Research Projects ◽  
Financial Industry ◽  
Financial Communication ◽  
Core Concepts ◽  
Set Up ◽  
The Individual

Abstract Wider parts of society-at-large are not fluent in the language of numbers, and financial literacy in particular is low in many countries (OECD, 2014). This paper shows how research on financial communication with and for practitioners (Cameron, Frazer, Rampton, & Richardson, 1992, p. 22) can foster intra-lingual translation in the financial sector, which increases financial texts’ communicative potential and finally enables laypersons to better understand the language of numbers. Such an increased understanding allows individuals to set up investment plans for their current and future wealth and, for example, make informed decisions about their pension plans. By doing so, financial crises on the individual, organizational, and societal level can be avoided, which benefits social welfare and society-at-large. Transdisciplinary Action Research (TDA) offers a framework and procedures to approach such goals through close collaboration of scholars and practitioners throughout research projects. Following TDA core concepts, a cyclic process of research and development has been established in the last two decades (e.g. Perrin, this volume; Whitehouse, 2014). Whereas applied linguists involved aimed at better understanding practices of writing and intra-lingual translation at the interface of technical and everyday language, stakeholders from the financial industry wanted to improve their communication. The representatives of society-at-large, finally, were interested in contributing to sustainably increasing financial literacy. In the first part of the present paper, I sketch the suitability of transdisciplinarity in general and TDA in particular in financial communication (Section 1). Then I define the key concepts of intra-lingual translation, communicative potential, and financial literacy (Section 2). Next, I outline the data corpus and explain how TDA was applied in a series of research projects (Section 3). The presented results on a macro-level shed light on the financial analysts’ situation and practices in their multilingual workplace: the findings on the micro-level suggest that financial analysts’ texts pose a risk of partial communicative failure (Section 4). The article concludes by indicating empirically based measures to develop financial literacy, intra-lingual translation across stakeholders and texts’ communicative potential in finance (Section 5).

Improving the Retirement Prospects of Lower-Wage Workers in a Defined-Contribution World

2007 ◽  
Vol 88 (3) ◽  
pp. 453-462 ◽  
Author(s):  
Judith G. Gonyea
Keyword(s):  
Financial Literacy ◽  
Pension Plans ◽  
Individual Responsibility ◽  
Retirement Savings ◽  
Defined Contribution ◽  
Savings Behavior ◽  
Service Workers ◽  
Retirement Security ◽  
Lower Wage ◽  
The Impact

Lower-wage workers have always faced challenges in saving for their retirement years. As U.S. businesses increasingly adopt defined-contribution pension plans and emphasize individual responsibility and choice, what is the impact of this shift on the working poor? Lack of pension coverage is a significant concern because Social Security alone will not assure a comfortable retirement for lower-income workers. Our survey of more than 300 lower-wage service workers revealed that significant predictors of retirement savings behavior included greater financial literacy as well as greater job stability, stronger workforce attachment, and higher income. Employer-sponsored pension plans were the most frequently used savings option. Based on the findings, we explore the potential impacts of the Pension Protection Act of 2006 (PPA) on lower-wage workers' retirement security and propose policy steps to reduce the risk of poverty being recycled into postretirement years.

scholarly journals AWARENESS ON PENSION PLANS-A STUDY OF INVESTORS’ IN BENGALURU CITY

2021 ◽  
Vol 9 (2) ◽  
pp. 1017-1021
Author(s):  
Pushpa B.V.
Keyword(s):  
Financial Literacy ◽  
Economic Status ◽  
Pension Plans ◽  
Willingness To Participate ◽  
Defined Contribution ◽  
Financial Decisions ◽  
Defined Contribution Plans ◽  
Income Adequacy ◽  
To Come ◽  
And Gender

Individuals make inconsistent, irrational financial decisions mainly due to disproportionate time preferences. Bias and procrastination prevail. Along with a default option, there is a need for a customized plan with individuals' socio-cultural and economic status.  Low participation rates are mainly due to a lack of awareness of pension literacy and behavioral aspects. Individuals have failed to create a corpus to protect themselves for retirement as there is a lack of awareness to suitability of a plan to one’s situation, failure to measure income adequacy at retirement, not able to identify the link between contributions made and pension drawdown, etc. Age and gender differences prevail strongly. Defined contribution plans are likely to dominate in global pension model in the years to come. Individuals are ready to own their risk but have little control and knowledge to cover themselves. Frequent timely and prompt advice or counseling from investment advisors will enable participants to understand the need, identify suitable options and schemes, and provide themselves with sustainable long-term savings. This should convert willingness to participate to real participation. Keywords: Financial literacy, Pension knowledge, Defined contribution pension plans (DCP), irrational decision making, demographics.

Financial literacy and retirement planning in chile

2015 ◽  
Vol 15 (2) ◽  
pp. 203-223 ◽  
Author(s):  
NATALIA GARABATO MOURE
Keyword(s):  
Financial Literacy ◽  
Financial Education ◽  
Retirement Planning ◽  
Pension Plans ◽  
Defined Contribution ◽  
Substantial Impact ◽  
The Core ◽  
Retirement Policy ◽  
Compound Interest ◽  
The Relationship

AbstractThis paper studies the relationship between financial literacy and retirement planning in Chile, a country with mandatory defined contribution pension plans at the core of its retirement policy. Using a novel dataset, we find that very few Chileans are planning for their retirement and that the levels of financial literacy are remarkably low with only 47% of the population understand compound interest and only 18% understand the concept of inflation. We also find a positive and significant relationship between financial literacy and retirement planning suggesting that investments in financial education could have a substantial impact on the way people think about retirement and therefore on their ability to reach retirement with adequate resources.

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