We assessed alternative presentations of investment risk using a discrete choice experiment which asked subjects to rank three investment portfolios for retirement savings across nine risk presentation formats and four underlying risk levels. Using Prospect Theory utility specifications we estimate individual-specific parameters for risk preferences in gains and losses, loss aversion, and error propensity variability.
Our results support presentations that describe investment risk using probability tails. Risk preferences and error propensity were found to vary significantly across sociodemographic groups and levels of financial literacy.
Predictors of the rate of BMD loss in older men: Findings from the CHAMP study
Bleicher, K., Cumming, R.G., Naganathan, V., Seibel, M., Creasey, H., Le Couteur, D.G., Handelsman, D.J., Waite, L.M. and Blyth, F. (2012). Osteoporosis International, December 2012.
This paper presents new evidence from a national survey of non-retired individuals with superannuation accounts between the ages of 25 and 65. Fielded in June of 2012, the survey responses suggest that Australians often are ill informed about many important features of the superannuation system. This lack of retirement system knowledge is consistent with findings in other countries.
Specifically, the survey suggests that Australian respondents are most challenged by questions associated with the access age to their superannuation savings, the risky composition of balanced funds (a popular default investment option), and the tax treatment of superannuation contributions and investments.
Existing research shows that adjustment to retirement is correlated with pre-retirement planning. This study presents new insights into the retirement preparedness of Australians at the later stages of working life.
Recent surveys of those approaching and entering retirement show that the extent of planning around exiting the workforce, financial management, bequest provision and activities during retirement vary greatly.
Transforming retirement: new definitions of life after work
Byles, J., Tavener, M., Parkinson, L., Warner Smith, P., Everingham, C. and Stevenson, D. (2013). Women and Ageing, Available online November 2012, Hardcopy published March 2013.
Vitamin D Status among Older Community Dwelling Men Living in a Sunny Country and Associations with Lifestyle Factors: The Concord Health and Ageing in Men Project
Hirani, V., Cumming, R.G., Blyth, F., Naganathan, V., Le Couteur, D.G., Handelsman, D.J., Waite, L.M. and Seibel, M.J. (2012). Journal of Nutrition, Health and Ageing, November 2012.
Functional Assessments used by Occupational Therapists with Older Adults at Risk of Activity and Participation Limitations: A Systematic Review and Evaluation of Measurement Properties
Wales, K., Clemson, L., Lannin, N., and Cameron, I. D. (2012). Systematic Reviews, October 2012.
Joelle H. Fong, Benedict SK. Koh, and Olivia S. Mitchell
This paper examines how inability to perform activities of daily living relates to the risk of nursing home admission over older adults' life courses.
Using longitudinal data on persons over age 50 from the Health and Retirement Study, we show that aging one year boosts the probability of having two or more disabilities by 9 to 12 percent in a multivariate logistic model.
This paper proposes a Notional Defined Contribution (NDC) mechanism to ensure pension mobility for migrating workers, in both the accumulation and drawdown phases. Plan governance would ensure independence from the three existing pension systems. Although the plan's design would be of the NDC type, requiring no pre-funding, in practice the relatively young migrant demographic has the potential to generate considerable reserves.
An appropriately structured NDC plan of this type is shown to be viable by reference to a previously developed model of Zhejiang Province's social security systems.
Integration of Balance and Strength Training into Daily Life Activity to Reduce Rate of Falls in Older People (The LiFE Study): Randomised Parallel Trial
Clemson, L., Fiatarone Singh, M.A., Bundy, A., Cumming, R.G., Manollaras, K., O'Loughlin, P. and Black, D. (2012). British Medical Journal, August 2012.
Many modern insurance products are designed as packages, whose items may be either included or not in the product actually purchased by the client.
For example: the endowment insurance which can include various rider benefits and options, the Universal Life insurance, the Variable Annuities, the presence of possible LTC benefits in pension products. The benefits provided by these products imply a wide range of "guarantees" and hence risks borne by the insurance company (or the pension fund). Guarantees and inherent risks clearly emerge in recent scenarios, in particular because of volatility in the financial markets and trends in mortality / longevity.
Sedative Load and Functional Outcomes in Community-Dwelling Older Australian Men: The CHAMP Study
Gnjidic, D., Le Couteur, D. G., Hilmer, S. N., Cumming, R. G., Blyth, F. M., Naganathan, V., Waite, L., Handelsman, D. J. and Simon Bell, J. (2012). Fundamental & Clinical Pharmacology, July 2012.
Erik Hernaes, Simen Markussen, John Piggott and Ola Vestad
The relationship between retirement and mortality is studied with a unique administrative data set covering the full population of Norway.
A series of retirement policy changes in Norway reduced the retirement age for a group of workers but not for others. By employing a difference-in-differences framework based on monthly birth cohort and treatment group status we first establish that the early retirement program significantly reduced the retirement age - this remains true when we account for program substitution, for example into the disability pension.
Determinants of Retirement Timing Expectations in the United States and Australia: A Cross-National Comparison of the Effects of Health and Retirement Benefit Policies on Retirement Timing Decisions
Sargent-Cox, K., Anstey, K., Kendig, H. and Skladzien, E. (2012). Journal of Ageing and Social Policy, June 2012.
This paper assesses the cost and risk faced by public sector, defined benefit plan providers arising from uncertain mortality, including longevity selection, mortality improvements, and unexpected systematic shocks.
Using longitudinal micro data on Australian pensioners, we quantify the extent of longevity selection at both aggregate and scheme level.
This paper uses the China Health and Retirement Longitudinal Study (CHARLS) data to investigate the net impact on the old age household income inequality when the new rural pension plan is in place. Logit and OLS analysis are used to estimate the changes of the probability and value of family transfers when other variables change.
Results indicate that net private transfers are in most cases uncorrelated with household income, suggesting that the current public transfer (the new rural pension) will not crowd out private transfers. Based on these findings, Gini index simulations are employed to compare income inequality with and without rural public pension.
Reexamining the declining effect of age on mortality differentials associated with excess body mass: Evidence of cohort distortions in the United States
Yu, Y. (2012). American Journal of Public Health, May 2012.
Evaluating a Dichotomized Measure of Self-Reported Hearing Loss against Gold Standard Audiometry: Prevalence Estimates and Age Bias in a Pooled National Dataset
Kiely, K., Anstey, K, Gopinath, B, Mitchell, P. and Browning, C. (2012). Journal of Aging and Health, April 2012.
Effects of Drug Burden Index on Cognitive Function in Older Men
Gnjidic, D., Le Couteur, D.G., Naganathan, V., Cumming, R.G., Creasey, H., Waite, L.M., Sharma, A., Blyth, F.M. and Hilmer, S.N. (2012). Journal of Clinical Psychopharmacology, April 2012.
Exercise to Enhance Mobility and Prevent Falls After Stroke: The Community Stroke Club Randomized Trial
Dean, C.M., Rissel, C., Sherrington, C., Sharkey, M., Cumming, R.G., Lord, S.R., Barker, R.N., Kirkham, C. and O'Rourke, S. (2012). Neurorehabilitation and Neural Repair, April 2012.
Prostate Specific Antigen Levels in Men Aged 70 Years and Over: Findings from The CHAMP Study.
Litchfield, M., Cumming, R.G., Smith, D., Naganathan, V., Le Couteur, D., Waite, L., Blyth, F. and Handelsman, D.J. (2012). Medical Journal of Australia, April 2012.
Intergenerational and Intercultural Encounters: Connecting Students and Older People through Language Learning
Cordella, M., Radermacher, H., Huang, H., Browning, C.J., Baumgartner, R., De Soysa, T. and Feldman, S. (2012). Journal of Intergenerational Relationships, March 2012.
When siblings wish for the well-being of their elderly parents, the cost of caregiving and long-term commitment creates a free-rider problem among siblings. We estimate a sequential game to investigate externality and strategic interaction among adult siblings regarding their location choice relative to their elderly parents.
High Risk Prescribing and Incidence of Frailty among Older Community-Dwelling Men
Gnijidic, D., Hilmer, S.N., Blyth, F., Naganathan, V., Cumming, R.G., Handelsman, D.J., McLachlan, A.J., Abernathy, D.R, Banks, E. and Le Couteur, D.G. (2012). Clinical Pharmacology and Therapeutics, February 2012.
Does Increased Sunlight Work as a Strategy to Improve Vitamin D Status in The Elderly: A Cluster Randomised Controlled Trial
Sambrook, P.N., Cameron, I., Chen, J.S., Cumming, R.G., Durvasula, S., Herrmann, M., Kok, C., Lord, S., Macara, M., March, L., Mason, R., Seibel, M., Wilson, N. and Simpson, J. (2012). Osteoporosis International, February 2012.
In this paper we investigate the macroeconomic and welfare effects of the major changes of the mandatory superannuation reform proposed in the 2010-11 Australian federal budget. These changes include gradual increases in the mandatory employer contributions from 9 to 12 percent of gross earnings and a policy that effectively removes the concessional 15 percent tax on mandatory contributions for workers with annual taxable income of up to $37,000.
This paper considers the pricing of European call options written on pure endowment and deferred life annuity contracts, also known as guaranteed annuity options. These contracts provide a guarantee value at maturity of the option. The contract valuation is dependent on stochastic interest rate and mortality processes.
We model the allocation of time resources by adult children between competing caring activities - those towards coresiding elderly and those towards coresiding children.
We test the implications of our model for children's school performance by focusing on Indonesia, a country characterized by heterogeneity in social norms, population ageing and reliance on the family for elderly support.
The insurance linked securities (ILS) market is an increasingly important alternative asset class for which risk and return analysis differs from other asset classes. Measures of portfolio risk and return for an ILS portfolio are based on the expected losses and expected excess returns over the risk free rate.
Multiple criteria decision making (MCDM) has found successful applications to many real world decision problems. This paper examines the application of two popular MCDM methods, Analytical Hierarchy Process (AHP) and ELECTRE III, to ILS portfolios.
Maathumai Nirmalendran, Michael Sherris and Katja Hanewald
This paper provides a detailed quantitative assessment of the impact of solvency capital requirements on product pricing and shareholder value for a life insurer. A multi-period firm value maximization model for a life annuity provider, allowing for stochastic mortality and asset returns, imperfectly elastic product demand, as well as frictional costs, is used to derive optimal capital and pricing strategies for a range of solvency levels reflecting differences in regulatory regimes.
This paper considers optimal reinsurance based on an assessment of the reinsurance arrangements for a large life insurer. The objective is to determine the reinsurance structure, based on actual insurer data, using a modified mean-variance criteria that maximises the retained premiums and minimizes the variance of retained claims while keeping the retained risk exposure constant, assuming a given level of risk appetite.
The portfolio of life and disability policies use quota-share, surplus and a combination of both quota-share and surplus reinsurance. Alternative reinsurance arrangements are compared using the modified mean-variance criteria to assess the optimal reinsurance strategy. The analysis takes into account recent claims experience as well as actual premiums paid by insured lives and to the reinsurers.
Using micro data from eleven European countries, we investigate the impact of being socially active on cognition in older age. Cognitive abilities are measured through scores on numeracy, fluency and recall tests.
We address the endogeneity of social activities through panel data and instrumental variable methods. We find that social activities have an important positive effect on cognition, with the results varying by gender.
