_________________________________________________________________
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 6, No. 6: March 24, 2005
_________________________________________________________________
Publisher: Employment, Labor, Compensation & Pension Law Journals
a division of
Social Science Electronic Publishing, Inc. (SSEP)
and Social Science Research Network (SSRN)
Editor: PAMELA PERUN
Urban Institute
Mailto:pamela@planetnow.com
Copyright: SSEP, Inc. 2005. All rights reserved.
Leading Social Science Research Delivered To Your Desktop
http://www.SSRN.Com/
___________________________________________________________
Topic of This Issue:
Pension Issues
___________________________________________________________
SEARCHING THE SSRN ELECTRONIC LIBRARY
To search the entire SSRN eLibrary, please visit:
http://papers.ssrn.com/
To browse all abstracts published in this journal, please visit:
http://www.ssrn.com/link/benefits-compensation-pension-law.html
To ensure delivery of this journal, please add LSN@SSRN.com to
your email contact list.
REDISTRIBUTION
Individual and professional subscriptions to the journal are for
single users. It is a violation of copyright to redistribute
this document electronically or otherwise without the explicit
permission of Social Science Electronic Publishing, Inc.
Site licenses for organizations are available by contacting
Mailto:Site@SSRN.Com
SIGN OFF
SUBSCRIPTION MANAGEMENT
You can change your journal subscriptions by going to the SSRN
User HeadQuarters. Please enter the email address where you
received this email in the "Your Email Address" field and
click "Submit". Click on your name on the next screen, and your
User ID and Password will be emailed to you. Once you have
successfully logged in, you will be able to change your journal
subscriptions. If you have questions or problems with this
process, please email UserSupport@SSRN.com or call 877-SSRNHelp
(toll free 877.777.6435).
ALIGNMENT
If this document is misaligned, please set type face to a
non-proportional font such as Courier 10.
PAPER DOWNLOADS
If you need assistance downloading papers from our web site,
please contact Mailto:Support@SSRN.Com
T A B L E of C O N T E N T S
_________________________________________________________________
NEW and FORTHCOMING ARTICLES
"Offering vs. Choice in 401(k) Plans: Equity Exposure and
Number of Funds"
Journal of Finance, Forthcoming
GUR HUBERMAN
Columbia Business School - Department of Finance &
Economics
WEI JIANG
Columbia Business School - Finance and Economics
Division
"Changes in Wealth for Americans Reaching or Just Past Normal
Retirement Age"
EBRI Issue Brief, No. 277, January 2005
CRAIG COPELAND
Employee Benefit Research Institute (EBRI)
"Retirement Annuity and Employment-Based Pension Income"
EBRI Notes, Vol. 26, No. 2, February 2005
KENNETH J. MCDONNELL
Employee Benefit Research Institute (EBRI)
"401(k)-Type Plan and IRA Ownership"
EBRI Notes, Vol. 26, No. 1, January 2005
CRAIG COPELAND
Employee Benefit Research Institute (EBRI)
"The Ticking Retirement Time Bomb: What State Governments Can Do"
EBRI Notes, Vol. 25, No. 11, November 2004
JIM JAFFE
Employee Benefit Research Institute (EBRI)
WORKING PAPERS
"Employer-Provided Benefit Plans, Workforce Composition and Firm
Outcomes"
ANJA DECRESSIN
Government of the United States of America
Bureau of the Census
JULIA LANE
National Science Foundation
Government of the United States of America
Bureau of the Census
The Urban Institute
KRISTIN MCCUE
Johns Hopkins University
MARTHA HARRISON STINSON
Government of the United States of America
Bureau of the Census
"The Corporate Governance of Defined Benefit Pension Plans:
Evidence from the United Kingdom"
JOćO F. COCCO
London Business School - Institute of Finance and
Accounting
PAOLO F. VOLPIN
London Business School
European Corporate Governance Institute (ECGI)
Centre for Economic Policy Research (CEPR)
S S R N I N F O R M A T I O N
_________________________________________________________________
* Partners in Publishing
* Administrative Information
- Missing issues & change of address
- Solicitation of abstracts
* Directors
* Subscription to SSRN Journals
_________________________________________________________________
ACQUIRING PAPERS
Download papers directly from the included web address or contact
the author or other contact person directly. Provide an address
to which the author or other contact person can send a paper
copy and mention that you saw the abstract in SSRN. Some of
SSRN's Partners in Publishing require a subscription or charge a
fee for electronic downloads.
EDITORIAL POLICIES
To provide the broadest coverage of research in Employee
Benefits, Compensation & Pension Law we do not referee working
papers. We accept abstracts of working papers in Employee
Benefits, Compensation & Pension Law whose topics suit the
coverage of the journal and which are part of the worldwide
scholarly discourse.
N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"Offering vs. Choice in 401(k) Plans: Equity Exposure and
Number of Funds"
Journal of Finance, Forthcoming
BY: GUR HUBERMAN
Columbia Business School - Department of Finance &
Economics
WEI JIANG
Columbia Business School - Finance and Economics
Division
Contact: WEI JIANG
Email: Mailto:wj2006@columbia.edu
Postal: Columbia Business School - Finance and Economics Division
3022 Broadway
New York, NY 10027 UNITED STATES
Phone: 212-854-9679
Fax: 212-316-9180
Co-Auth: GUR HUBERMAN
Email: Mailto:gh16@columbia.edu
Postal: Columbia Business School - Department of Finance &
Economics
807 Uris Hall
3022 Broadway
New York, NY 10027 UNITED STATES
ABSTRACT:
Records of more than half a million participants in more than
six hundred 401(k) pension plans indicate that participants tend
to use a small number of funds: The number of participants using
a given number of funds peaks at three funds and declines after
more than three funds. Participants tend to allocate their
contributions evenly across the funds they use, with the
tendency weakening with the number of funds used. The median
number of funds used is between three and four, and is not
sensitive to the number of funds offered by the plans, which
ranges from 4 to 59. A participant's propensity to allocate
contributions to equity funds is not very sensitive to the
fraction of equity funds among those offered by his plan. The
paper also comments on limitations on inference available from
experiments and from aggregate-level data analysis.
JEL Classification: G12, G23
______________________________
"Changes in Wealth for Americans Reaching or Just Past Normal
Retirement Age"
EBRI Issue Brief, No. 277, January 2005
BY: CRAIG COPELAND
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=655885
Contact: CRAIG COPELAND
Email: Mailto:COPELAND@EBRI.ORG
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: 202-775-6356
Fax: 202-775-6312
ABSTRACT:
This paper provides a first step in determining how retirees now
starting to retire - those first to be affected by the shift to
lump-sum payments and 401(k) asset accumulation - are managing
their wealth. Americans born from 1931-1941 are the focus of
this study, since these Americans ranged in age from 51-61 in
1992 (at the beginning of the study period) and had reached age
61-71 by 2002 (the end of the study period). These Americans
have been affected by fundamental changes in the
employment-based retirement plan market, as fewer people are
covered by defined benefit pension plans and more people are
covered by defined contribution plans, principally the 401(k)
plan. This shift has led to tremendous growth in IRA assets, as
workers used these tax-favored savings vehicles to roll over
their defined contribution and/or defined benefit assets upon
job change or retirement.
JEL Classification: D31, J14
______________________________
"Retirement Annuity and Employment-Based Pension Income"
EBRI Notes, Vol. 26, No. 2, February 2005
BY: KENNETH J. MCDONNELL
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=679037
Contact: KENNETH J. MCDONNELL
Email: Mailto:MCDONNELL@EBRI.ORG
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: 503-238-3420
Fax: 202-775-6312
ABSTRACT:
This paper reports recent data from the March 2004 Current
Population Survey conducted by the U.S. Census Bureau confirming
earlier findings that gender, marital status, age, education,
and other demographic variables have a significant impact on the
likelihood of a worker receiving a retirement annuity and/or
employment-based pension income in retirement. There may also be
a strong correlation between these same variables and the amount
of pension income received from employment-based retirement
plans.
The PDF for the above title, published in the February 2005
issue of EBRI Notes, also contains the fulltext of another
February 2005 EBRI Notes article abstracted on SSRN: "The
Relationship Between Income and Health Insurance: Rethinking the
Use of Family Income in the Current Population Survey."
JEL Classification: D31, J16, J26, J33
______________________________
"401(k)-Type Plan and IRA Ownership"
EBRI Notes, Vol. 26, No. 1, January 2005
BY: CRAIG COPELAND
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=655903
Contact: CRAIG COPELAND
Email: Mailto:COPELAND@EBRI.ORG
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: 202-775-6356
Fax: 202-775-6312
ABSTRACT:
This paper begins with an examination of the contributions of
workers ages 21-64 to 401(k)-type plans. Next, it discusses
ownership and average and median account balances of 401(k)-type
plans and IRAs. The ownership of a combination of 401(k)-type
plans and IRAs is then investigated across various demographic
groups. The analysis is based on recent U.S. Census Bureau
data.
The PDF for the above title, published in the January 2005
issue of EBRI Notes, also contains the fulltext of another
January 2005 EBRI Notes article abstracted on SSRN: "Income of
the Elderly Population: 2003."
JEL Classification: D31, D91, J33
______________________________
"The Ticking Retirement Time Bomb: What State Governments Can Do"
EBRI Notes, Vol. 25, No. 11, November 2004
BY: JIM JAFFE
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=622862
Contact: JIM JAFFE
Email: Mailto:jaffe@ebri.org
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: 202-775-6353
Fax: 202-775-6312
Paper Requests:
Contact Alicia Willis at Mailto:publications@ebri.org, or 2121 K
St., NW, Suite 600, Washington, DC 20037-1896.
Phone:(202)572-7422, Fax:(202)775-6312.
ABSTRACT:
This paper summarizes discussions at two regional meetings held
in September 2004 by members of the Reforming States Group about
how state governments can most effectively respond to the
likelihood that a large number of today's public- and
private-sector workers won't be able to afford even a modest
standard of living in retirement, particularly if they get hit
with major home health or nursing home bills. The Boston and St.
Louis conversations dealt with two interrelated issues:
retirement income adequacy generally, and the cost of health
care (particularly long-term care) in retirement. States were
the focus of these discussions because of the number of
different roles they play in retirement/old age security.
JEL Classification: D31, D91, H77, J14
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Employer-Provided Benefit Plans, Workforce Composition and Firm
Outcomes"
BY: ANJA DECRESSIN
Government of the United States of America
Bureau of the Census
JULIA LANE
National Science Foundation
Government of the United States of America
Bureau of the Census
The Urban Institute
KRISTIN MCCUE
Johns Hopkins University
MARTHA HARRISON STINSON
Government of the United States of America
Bureau of the Census
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=638482
Paper ID: LEHD Technical Paper No. TP-2003-06
Date: December 2004
Contact: ANJA DECRESSIN
Email: Mailto:anja.decressin@census.gov
Postal: Government of the United States of America
Bureau of the Census
Washington, DC 20233 UNITED STATES
Co-Auth: JULIA LANE
Email: Mailto:jlane@nsf.gov
Postal: National Science Foundation
4201 Wilson Boulevard
Arlington, VA 22230 UNITED STATES
Co-Auth: KRISTIN MCCUE
Email: not available
Postal: Johns Hopkins University
Baltimore, MD 21218 UNITED STATES
Co-Auth: MARTHA HARRISON STINSON
Email: Mailto:martha.stinson@census.gov
Postal: Government of the United States of America
Bureau of the Census
Washington, DC 20233 UNITED STATES
ABSTRACT:
What do firms gain by offering benefits? Economists have
proposed two payoffs: (i) benefits may be a more cost-effective
form of compensation than wages for employees facing high
marginal tax rates, and (ii) benefits may attract a more stable,
skilled workforce. Both should improve firm outcomes, but we
have little evidence on this matter. This paper exploits a rich
new dataset to examine how firm productivity and survival are
related to benefit offering, and finds that benefit-offering
firms have higher productivity and higher survival rates.
Differences in firm and workforce characteristics explain some
but not all of the differences in outcomes.
JEL Classification: J32, J33, l23, l20
______________________________
"The Corporate Governance of Defined Benefit Pension Plans:
Evidence from the United Kingdom"
BY: JOćO F. COCCO
London Business School - Institute of Finance and
Accounting
PAOLO F. VOLPIN
London Business School
European Corporate Governance Institute (ECGI)
Centre for Economic Policy Research (CEPR)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=670685
Date: January 2005
Contact: PAOLO F. VOLPIN
Email: Mailto:pvolpin@london.edu
Postal: London Business School
Sussex Place
Regent's Park
London NW1 4SA, UNITED KINGDOM
Phone: +44 20 7262 5050
Fax: +44 20 7724 3317
Co-Auth: JOćO F. COCCO
Email: Mailto:jcocco@london.edu
Postal: London Business School - Institute of Finance and
Accounting
Sussex Place
Regent's Park
London NW1 4SA, UNITED KINGDOM
ABSTRACT:
This paper studies the governance of defined-benefit pension
plans in the United Kingdom. We construct a governance measure,
equal to the proportion of trustees of the pension plan who are
also executive directors of the sponsoring company. Our findings
indicate that pension plans of indebted companies with a higher
proportion of insider-trustees: (i) invest a higher proportion
of the pension plan assets into equities, (ii) contribute less
into the pension plan, and (iii) have a larger dividend payout
ratio. This evidence supports an agency view, whereby
insider-trustees act in the interest of shareholders of the
sponsoring company, and not necessarily pension plan members.