Has COVID Affected Pensions for Workers without Social Security?


PDF: https://crr.bc.edu/wp-content/uploads/2022/01/SLP81.pdf



At the outset of the pandemic recession, many feared it would undermine workers’ employer-sponsored retirement plans.

State and local employees who are not covered by Social Security would have been particularly vulnerable, as they lack the buffer this program offers.

Their employer defined benefit plans would have been hurt by a long recession with poor investment returns and reduced contributions due to tax shortfalls.

Instead, these plans exceeded their return targets; tax revenues held up; and government sponsors got stimulus aid, so plan funded ratios actually improved.

And long-term structural headwinds such as negative cash flows and aggressive return targets still pose little risk to their ability to pay future benefits.

Author(s):Jean-Pierre Aubry and Kevin Wandrei

Publication Date: January 2022

Publication Site: Center for Retirement Research at Boston College, Working Paper

Covid Is Hitting Workers Differently Than the 2008 Financial Crisis

Link: https://www.ineteconomics.org/perspectives/blog/covid-is-hitting-workers-differently-than-the-financial-crisis


In a new INET working paper, we examine inequality in employment outcomes across social groups during recessions. We take a comparative perspective, studying results from two recent and severe US recessions: the “Great Recession” linked with the global financial crisis beginning in late 2007 and the “lockdown” recession caused by the COVID-19 pandemic. Comparing these two events presents an interesting case study to explore inequality in recessions.

The severity of a recession depends both on how much employment declines and the persistence of those declines. The primary job-months lost statistic in our analysis is designed to capture both of these dimensionsThis measure simply adds up the difference between actual employment and pre-recession employment over the recession months. For example, if the pre-recession employment trend for a demographic group was flat and a person in that group lost a job in April but went back to work in July, that person’s experience would add three job-months lost to the total in their demographic group.

Author(s): Steven Fazzari, Ella Needler

Publication Date: 19 April 2021

Publication Site: Institute for New Economic Thinking

All eyes on Chile´s Pinera as congress approves a fresh pensions drawdown

Link: https://www.reuters.com/world/americas/all-eyes-chiles-pinera-congress-approves-fresh-pensions-drawdown-2021-04-23/


Chile´s Congress on Friday approved by a large majority a move to allow citizens to withdraw a third tranche of their privately held pensions to assuage economic hardship wrought by the coronavirus pandemic.

Lawmakers in the country´s lower house approved the measure with 119 to 17, with 3 abstentions, prompting cheering and applause. Senators greenlighted the move earlier this week.

Previously, Congress approved two withdrawals of 10% from pension pots in July and December, with the help of members of President Sebastian Pinera’s Chile Vamos coalition who defied instructions to vote the initiatives down.

Author(s): Aislinn Laing

Publication Date: 23 April 2021

Publication Site: Reuters

How covid-19 triggered America’s first female recession in 50 years

Link: https://www.economist.com/graphic-detail/2021/03/08/how-covid-19-triggered-americas-first-female-recession-in-50-years



RECESSIONS TYPICALLY hit men harder than women, not least because they tend to disproportionately affect male-dominated industries, such as construction and manufacturing. In the recession of 2008-09, for example, men accounted for some three-quarters of American job losses. The most recent downturn, by contrast, has weighed on female-dominated sectors, such as retail and hospitality. Last year the share of women on American payrolls fell from 50% in March 2020 to 49.1% two months later, before inching back up to 49.8% today.

recent paper by three economists at the Federal Reserve Bank of San Francisco suggests that some of the disparity can be explained by differences in parental responsibilities. Using monthly data from the Census Bureau’s Current Population Survey, the researchers analysed the labour-market outcomes of four groups of prime-age workers (those aged from 25 to 54): mothers; fathers; women without children; and men without children. They found that women suffered more than men in the wake of the pandemic but mothers fared worst of all. Between February and December the employment rate of mums dropped by 7% and their labour-force participation rate fell by 4%. Fathers, by comparison, suffered the least among the four groups—even less than childless men. Their employment and labour-force participation rates fell by 4% and 1%, respectively. Another recent study from the Federal Reserve Bank of Minneapolis found that that the effect was biggest for mothers with children under five.

Publication Date: 8 March 2021

Publication Site: The Economist